Corporate: No Bonus Depreciation · Individual/FTE: 20% Bonus for 2026, 0% After
Michigan Decoupled via HB 4961
4.25% Flat Individual · 6% Flat CIT
Federal Deduction Amplified
22–35% Typical Reclassification
Michigan Building Value into Short-Life Assets
All Commercial Asset Classes
Statewide Michigan
The Basics
What Cost Segregation Does for Michigan Property Owners
A cost segregation study identifies building components, HVAC systems, specialty flooring, parking surfaces, interior finishes, exterior lighting, that qualify for accelerated depreciation on 5-, 7-, or 15-year schedules rather than the default 27.5-year (residential rental) or 39-year (commercial) building schedule. Front-loading those deductions increases first-year cash flow and lowers current-year federal taxable income.
In Michigan, the federal benefit works the same way it does anywhere, the One Big Beautiful Bill (OBBBA, P.L. 119-21) permanently restored 100% bonus depreciation for qualified property placed in service after January 19, 2025, and that federal benefit applies to Michigan properties in full. State-level treatment is where Michigan is different, and the treatment splits by entity type. Michigan Corporate Income Tax (CIT) has long been fully decoupled from 168(k), no bonus depreciation is allowed at the corporate level (MCL 206.603(2), 206.607(1)). Individual and flow-through entity (FTE) taxpayers continue to conform to 168(k), but under HB 4961 (signed October 7, 2025), Michigan freezes IRC conformity for depreciation purposes at December 31, 2024, meaning the pre-OBBBA phase-down applies: 40% bonus for 2025, 20% bonus for 2026, 0% for 2027 and later. Michigan is also decoupled from 168(n) qualified production property for all taxpayers.
Federal Deduction Is Where the Money Is
Michigan’s Tax Landscape: Why Cost Segregation Matters Here
Individual Income Tax
4.25% flat.
Corporate Income Tax
6% flat on Michigan taxable income.
Bonus Depreciation Conformity
Corporate: fully decoupled from 168(k) always (MCL 206.603(2), 206.607(1)). Individual/FTE: conforms to §168(k) under IRC as in effect December 31, 2024, pre-OBBBA phase-down applies (40% for 2025, 20% for 2026, 0% for 2027+). §168(n) qualified production property: fully decoupled for all taxpayers under HB 4961.
§179 Expensing
For CIT, Michigan conforms to federal 179 amounts. For individual/FTE, Michigan freezes at 2024 IRC limits (pre-OBBBA cap ~$1.25M for 2025), does not adopt OBBBA’s $2.56M cap.
Michigan Personal Property Tax
Michigan repealed most industrial personal property tax and commercial personal property tax below $180,000 (small business exemption), but larger commercial personal property is still subject to state PPT. Separate from income tax.
Property Tax
~1.35% effective on owner-occupied housing, higher than the national average.
§481(a) Catch-Up
For Michigan properties owned more than a year without a study, an automatic accounting-method change (Form 3115 under Rev. Proc. 2015-13 and its updates) captures all missed depreciation into the current tax year at the federal level, no amended returns required.
Every Commercial Asset Class in Michigan
Michigan Property Types Where Cost Segregation Delivers
Automotive manufacturing
Detroit metro auto plants (GM, Ford, Stellantis), assembly and stamping operations across the state, EV battery investments (LG Energy Solution, Ford BlueOval Battery Park). Tier 1/Tier 2 supplier facilities across southeast Michigan.
Furniture & manufacturing
Grand Rapids office furniture (Steelcase, Herman Miller-MillerKnoll, Haworth) and general manufacturing across west Michigan.
Pharmaceutical & life sciences
Kalamazoo (Pfizer, Stryker), Ann Arbor life sciences (adjacent to University of Michigan). Specialty pharma facilities with heavy reclassification content.
Healthcare & medical office
University of Michigan Health, Corewell Health, Henry Ford Health, McLaren Health Care corridors across Detroit metro and statewide.
Multifamily
Detroit metro (particularly Oakland County and Wayne County corridors), Grand Rapids, Ann Arbor (University of Michigan market), and Traverse City multifamily development.
Hospitality & tourism
Traverse City, Mackinac Island, Great Lakes coastal corridor, and destination resort hospitality. Detroit business travel corridor.
Retail & mixed-use
Statewide retail centers and mixed-use developments, particularly in Detroit metro suburbs.
Agriculture & food processing
Cherry and specialty ag processing (Traverse City area), plus food processing operations across the state.
Investment residential
5+ unit properties eligible for cost segregation.
Not sure whether your Michigan property qualifies? Request a free benefit analysis, we’ll tell you honestly.
Credentialed. Independent. Nationwide
Why The Ambrose Group?
MAI-certified appraisers, in-house engineer
The IRS prefers engineering-based studies over rule-of-thumb estimates. Our in-house engineer conducts the analysis, reviews construction documents, and physically identifies reclassifiable components. Many providers estimate; we don’t.
IRS-compliant methodology
Every Ambrose study follows the IRS Cost Segregation Audit Techniques Guide (ATG, Publication 5653).
30+ years of nationwide experience
Headquartered in Texas, serving Michigan and all 50 states.
Full audit support
Every study includes documentation and audit support at no additional charge.
CPA-ready reports
We deliver a complete reclassification package your CPA can apply directly, including the depreciation detail your CPA needs to manage Michigan’s split treatment (corporate: full addback; individual/FTE: pre-OBBBA phase-down).
Single-property to multi-state portfolios
Whether you own one Michigan commercial building or a portfolio spanning multiple states, we scale the engagement to fit.
Real Numbers
What First-Year Savings Might Look Like in Michigan
Results depend on property type, cost basis, construction year, and applicable depreciation rates, and we run a free benefit analysis before you commit to a study so you can see projected numbers first.
As a reference point, an Ambrose Group engagement on a $2.9M commercial property delivered $657,692 in first-year depreciation increase and $230,192 in first-year tax savings. In Michigan specifically, the federal Year 1 savings apply fully. For corporate taxpayers, the Michigan state benefit is spread across regular MACRS (no bonus). For individual/FTE taxpayers, Michigan allows 20% bonus for 2026 (pre-OBBBA phase-down), then 0% for 2027+. The federal deduction combined with Michigan’s flat rates still delivers meaningful value.
Get Started
Free Michigan Cost Segregation Benefit Analysis
Tell us about your Michigan property, asset type, acquisition or construction cost, when it was placed in service, and we’ll run a free benefit analysis showing projected first-year depreciation and tax savings before you commit to a study.
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Right approach for your property type
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Federal benefit modeled + Michigan state-timing considerations (corporate vs individual/FTE)
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Clear read on the study’s projected ROI
Prefer to talk? Call us directly:
(713) 688-7733
The Ambrose Group headquarters, Jersey Village, TX (serving Michigan and all 50 states).
Request Your Free Analysis
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How It Works, Michigan & Nationwide
Our Cost Segregation Process
What Clients Say
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Cost Segregation in Michigan
Frequently Asked Questions
Does Michigan conform to federal bonus depreciation rules?
It depends on entity type. For Corporate Income Tax (CIT), Michigan has long been fully decoupled from 168(k), no bonus depreciation is allowed at the corporate level (MCL 206.603(2), 206.607(1)). For individual and flow-through entity (FTE) taxpayers, Michigan conforms to §168(k) under IRC as in effect December 31, 2024, meaning pre-OBBBA phase-down applies: 20% bonus for 2026, 0% for 2027+. Michigan also decouples from §168(n) qualified production property for all taxpayers under HB 4961 (signed October 7, 2025). Your federal Year 1 tax savings from a cost segregation study are fully preserved.
What about Michigan’s §179 cap?
For CIT, Michigan conforms to federal §179 amounts. For individual and FTE taxpayers, Michigan freezes §179 at 2024 IRC limits (pre-OBBBA cap, ~$1.25M for 2025), does not adopt OBBBA’s $2.56M cap. Your CPA manages the timing difference.
How does Michigan’s flat income tax interact with a cost segregation study?
Michigan has a flat 4.25% individual income tax and a flat 6% Corporate Income Tax. Because Michigan decouples significantly from bonus depreciation, the state-level Year 1 benefit is limited or nonexistent (depending on entity type). The federal Year 1 benefit is where most of the study’s economics live.
What Michigan commercial property types benefit most from cost segregation?
Detroit-metro auto manufacturing (GM, Ford, Stellantis assembly and stamping plants), EV battery investments, Grand Rapids furniture and manufacturing, Kalamazoo pharma facilities (Pfizer, Stryker), Ann Arbor life sciences, and multifamily across Detroit metro and Grand Rapids. Equipment-heavy manufacturing and pharma property typically produces the strongest results.
Can I do a cost segregation study on a Michigan property I’ve owned for years?
Yes, A 481(a) adjustment via an automatic accounting-method change (Form 3115 under Rev. Proc. 2015-13 and its updates) lets you capture all missed depreciation from prior years into the current tax year without amending past returns. Especially valuable for long-held Michigan auto manufacturing, pharma, and industrial properties.
How do you do a cost segregation study on a Michigan property when you’re based in Texas?
Cost segregation is governed by federal tax law, so the methodology is identical regardless of state. Our engineer works either through an in-person Michigan site visit or, for well-documented properties, a virtual site inspection using high-definition video, construction documents, and interactive tools. Both are IRS-compliant.
What construction era of Michigan property produces the strongest cost segregation outcomes?
Properties placed in service since 1987 are eligible under current IRS guidance, and studies limited to the last 7–10 years tend to deliver the strongest ROI. Michigan’s EV battery investment pipeline (Ford BlueOval, LG Energy Solution), auto manufacturing reinvestment, and Detroit-metro multifamily buildout have produced substantial newer commercial property in the ideal window.
Does Michigan’s property tax rate or personal property tax affect the cost seg decision?
Michigan’s owner-occupied effective property tax rate is around 1.35%. Michigan also imposes Personal Property Tax (PPT) on commercial personal property above the small business exemption ($180,000 true cash value threshold). Neither directly reduces the income-tax benefit from cost segregation, but your CPA should model total cost of ownership when planning equipment-heavy Michigan property.
What documentation do you need for a Michigan cost segregation study?
Purchase or construction cost documentation, a current depreciation schedule from your CPA, construction plans or specs (when available), any prior appraisals, and, for renovation studies, improvement records. Because Michigan has split treatment (corporate vs individual/FTE) and decouples from §168(n), your CPA will need the detailed asset schedule. We provide it as part of the standard deliverable.
Can you handle Michigan multi-property portfolios? How long does a study take?
Yes, we regularly run cost segregation studies across multi-state and Michigan-only portfolios. Common for Detroit-metro auto manufacturing operators with multiple plants, EV battery operators, Grand Rapids furniture operators, and Detroit-metro multifamily portfolio owners. Typical study timeline is 4–8 weeks per property; complex manufacturing and pharma facilities take longer proportional to the equipment-cataloging effort.
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Talk to Trusted Cost Segregation Consultants
We live by our motto: “Everything we do is driven by the relationship, not the transaction”, and we mean it. Whether you have a Michigan property to evaluate or a multi-state portfolio to review, we’re here to help. Contact our real estate firm.