Michigan Mileage and Vehicle Tax Records (2026): IRC Decoupling, TNC Records and Automated Vehicle Law
General information, not tax or legal advice. Talk to your tax preparer or attorney about your situation.
Michigan starts from federal adjusted gross income, so a self-employed driver's federal mileage deduction carries over. Starting with 2025, Michigan recalculates bonus depreciation and Section 179 under the federal code as of December 31, 2024. Rideshare companies register with LARA and keep trip records one year, and automated vehicles may operate on Michigan roads.
Michigan mostly follows federal AGI, but a 2025 law separated it from some federal depreciation changes. This guide covers what the Michigan Department of Treasury and the Michigan Compiled Laws (MCL) say as of October 16, 2026.
The federal baseline every Michigan driver starts from
Most vehicle deductions begin on your federal return. If you're self-employed, you can generally use the standard mileage rate or actual expenses for the business share of your car (IRS Topic 510). For 2026 the business rate is 72.5¢ per mile for January 1 to June 30 (IR-2025-128 / Notice 2026-10) and 76¢ per mile for July 1 to December 31 (IR-2026-29 / Announcement 2026-11) (IRS standard mileage rates). EVs use the same rates; see the 2026 EV mileage rate guide. Most employees can't deduct unreimbursed car expenses federally (Topic 510). IRS Publication 463 asks for each business trip's miles, date, destination and purpose, plus total miles. Commuting stays personal (commuting vs business miles).
How Michigan treats vehicle deductions
The 2025 MI-1040 instructions start the return with federal adjusted gross income and set the 2025 rate at 4.25%. A Schedule C vehicle deduction is already in federal AGI. The 2025 instructions don't list a separate Michigan deduction for unreimbursed employee business expenses.
Depreciation: the 2025 decoupling
The 2025 Schedule 1 instructions say P.A. 24 of 2025 requires adjustments for separating from the Internal Revenue Code. The worksheet recalculates bonus depreciation using IRC 168(k) as in effect on December 31, 2024, and Section 179 as of the same date. It also adjusts gain or loss when that property is sold. The net goes on Schedule 1 as an addition or a subtraction. See robotaxi fleet depreciation and Section 179.
Self-employment tax
Schedule 1, line 2 has Michigan residents add back the deduction for self-employment tax taken on the federal return, to the extent it reduced AGI. Your preparer handles this from your federal return.
Rideshare (TNC) rules in Michigan
The Limousine, Taxicab, and Transportation Network Company Act (2016 PA 345) requires a TNC to register with the Department of Licensing and Regulatory Affairs (LARA) before operating (MCL 257.2104). Under MCL 257.2113, the company keeps an individual trip record for at least one year, with pickup and drop-off, duration, distance and fee. Insurance must cover 50/100/25 while you're logged on and $1 million combined during a ride (MCL 257.2123). MCL 257.2115 bars local TNC taxes, fees and licenses. Because the company only keeps trips one year, save your own. See which rideshare miles count.
Robotaxis and automated vehicles in Michigan
MCL 257.665 says an automated motor vehicle may be operated on a street or highway in Michigan. When an automated driving system that allows operation without a human is engaged, it's considered the driver for traffic laws. Before testing, the manufacturer or upfitter gives the Secretary of State proof of insurance. Under MCL 257.665b, eligible manufacturers may run a "SAVE project", which MCL 257.2b defines as making on-demand automated vehicle networks available to the public. The fleet must have automatic crash notification and a data recording system. For fleet records, see robotaxi fleet tax basics.
What to keep in your Michigan records
- Each business trip's date, start, destination, purpose and miles, plus total miles for the year (Pub 463); a weekly log counts as timely kept.
- Separate Business, Commute and Personal totals for Form 4562 Part V.
- Keep records until the period of limitations runs out, generally 3 years federally (IRS); ask your preparer about the state period.
- If you claimed bonus depreciation or Section 179 federally: cost, placed-in-service date and federal figures, so your preparer can complete the Michigan decoupling worksheet.
- For rideshare: download receipts and summaries at least yearly; the TNC only has to keep trip records one year.
For the full list of log fields, see what the IRS asks you to record.
Example: 1,000 hypothetical business miles driven in September 2026 × 76¢ (IR-2026-29) = $760 at the federal standard rate. Miles driven in March 2026 would use 72.5¢ (IR-2025-128) instead, so keep each trip's date. Estimates, not tax advice.
One log for both returns
A Michigan return doesn't call for a second mileage log; your preparer works from the same business, commuting and personal miles. CyberDeduct builds a mileage log around IRS Pub 463 from your Tesla's own trip and odometer data (Model S, 3, X, Y and Cybertruck). You connect your Tesla account once through Tesla's standard account sign-in (OAuth); CyberDeduct never sees or stores your password. Home/work rules and route templates label most trips Business, Commute or Personal; you tap to change any label and confirm the purpose. The dashboard shows your business-use percentage and warns you on the 28th if you're under 50%. You export a PDF or CSV log plus a Form 4562 Part V worksheet for your preparer. See how the log is built or see plans.
Sources (checked October 16, 2026)
- Michigan Treasury, 2025 MI-1040 instructions
- Michigan Treasury, 2025 Schedule 1 instructions
- 2016 PA 345 (MCL 257.2101 et seq.)
- MCL 257.2104
- MCL 257.2113
- MCL 257.2115
- MCL 257.2123
- MCL 257.2b
- MCL 257.665
- MCL 257.665b
- IRS, Standard mileage rates; IRS Publication 463; IRS Topic 510
Frequently asked questions
Does Michigan use my federal mileage deduction?
Generally yes for the self-employed. The MI-1040 starts from federal adjusted gross income, which already includes Schedule C vehicle expenses.
How does Michigan handle bonus depreciation after 2025?
P.A. 24 of 2025 requires recalculating bonus depreciation and Section 179 using the federal code as of December 31, 2024, with the net as a Schedule 1 adjustment.
Who regulates rideshare companies in Michigan?
The Department of Licensing and Regulatory Affairs. TNCs register under 2016 PA 345 before operating (MCL 257.2104).
How long does a Michigan TNC keep trip records?
At least one year after each trip, with pickup and drop-off, duration, distance and fee (MCL 257.2113).
Are driverless cars legal in Michigan?
Yes. MCL 257.665 allows automated motor vehicles on Michigan roads, and MCL 257.665b lets eligible manufacturers run on-demand networks through SAVE projects.
This article is general information, not tax or legal advice. Talk to your tax preparer or attorney about your situation. State laws and bill status change; check the linked sources for the current text.
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