How Much Do Fishing Guides Make in Michigan?
Builds guide sites for a livingPublished July 5, 2026Last updated July 27, 202615 min read
- Michigan charges a flat 4.25 percent on individual income, with a $5,800 personal exemption for 2025.
- An elective entity-level tax lets partnerships, most LLCs and S corporations pay members' tax for them.
- Sole proprietorships and C corporations are expressly ineligible to make that election.
- The statute ties the tax's continued existence to the federal state and local deduction limit.
- That federal cap currently stands at $40,000 combined, not reduced below $10,000.
Michigan built a second income tax that only some businesses are allowed to pay. It is elective, it is charged at the same rate individuals pay, and the members of an electing business get a refundable credit for it. It is also expressly unavailable to sole proprietors, which is what most single-boat guide operations are. So the largest structural tax lever in the state is one a typical guide cannot pull without first changing what their business is, and across the state-by-state run of these pages no other legislature has drawn that line quite so plainly.
| Business form | Eligible to elect |
|---|---|
| LLC filing a federal return as a partnership | Yes |
| Partnership, limited partnership, limited liability partnership, general partnership | Yes |
| S corporation | Yes |
| Sole proprietorship | No |
| C corporation | No |
| Publicly traded partnership under IRC 7704 | Excluded |
| Michigan individual income tax rate, tax year 2025 | 4.25% |
What the state charges on a guiding year
4.25 percent, with a personal exemption of $5,800 for tax year 2025.
The ordinary answer is short. Treasury's year-specific guidance gives the tax rate as 4.25 percent and the personal exemption amount as $5,800 for tax year 2025, with a special exemption of $3,400 and a qualified disabled veteran deduction of $500. There are no brackets. Whatever a boat clears, the rate on it is the same, which puts Michigan among the simplest states in this series to project an income-tax bill for.
The second tax, and what it is for
An elective entity-level tax that lets a business pay its members' Michigan tax for them.
2021 Public Act 135 added Chapter 20 within Part 4 of the Michigan Income Tax Act, effective 1 January 2021. Treasury's own description is that the tax is elected and levied on the Michigan portion of the positive business income tax base of a flow-through entity, that it allows the entity to elect to pay tax on certain income at the individual income tax rate, and that where it does, members become eligible for a refundable income tax credit. The department states the design goal directly: collecting the same amount of income tax from the business entity as would otherwise be collected from its members.
Why a state would build that
Because a business can deduct a state tax federally in a way an individual now cannot.
The reason sits one level up, in federal law. An individual's deduction for state and local taxes is capped. A business paying tax at the entity level is in a different position. So a number of states, Michigan among them, created a route by which the same money is paid by the business rather than by the owner. Treasury does not have to argue the point, because the statute says it: the continued levy of the tax is contingent upon the existence of the federal state and local tax deduction limitation.
The cap the whole thing hangs on
$40,000 combined, or $20,000 filing separately, not reduced below $10,000.
That federal limit has a current number. The agency's topic page on deductible taxes states that an individual's deduction for state and local taxes, on lines 5a, 5b and 5c of Schedule A, is limited to a combined total of $40,000, or $20,000 if married filing separately, subject to a modified adjusted gross income limitation but not reduced below $10,000. Read that alongside the Michigan sentence above and the shape becomes clear. Michigan wrote a tax whose survival is tied to a federal provision it does not control.
A state tax with a federal off-switch
If the federal cap goes, the statute says the state tax stops.
That is an unusual thing to find in a revenue statute and it deserves stating plainly rather than buried. Most state taxes exist because a legislature decided they should. This one exists because a federal limitation exists, and it is drafted to end with it. For anyone weighing a change of business form partly to reach this election, that is a real planning fact. The benefit being chased is contingent by design.
Who is in and who is out
Partnerships, most LLCs and S corporations are in. Sole proprietors are not.
Treasury lists the eligible forms as limited liability companies filing federal returns as partnerships, partnerships including limited partnerships, limited liability partnerships and general partnerships, and S corporations. It then names who is not eligible: businesses that are not flow-through entities, such as sole proprietorships and C corporations. Publicly traded partnerships under IRC 7704 and flow-through entities subject to the financial institutions provisions are separately excluded. A flow-through entity is defined as an S corporation or a partnership under the internal revenue code.
What that means for a one-boat operation
The default business form for this trade is the one form shut out.
Most single-boat guide operations run as sole proprietorships, because that is what happens by default when one person starts selling trips and does not file anything to say otherwise. That is precisely the form Treasury names as ineligible. So reaching this election is not a box to tick on a return. It means becoming an LLC that files as a partnership, or a partnership, or an S corporation first, which is a structural decision with consequences well beyond one line of state tax. The groundwork for that decision sits in the comparison of operating as yourself against operating as an entity and in what an LLC actually changes for a guide.
The election is not annual
It runs three years, so it is a commitment rather than a trial.
Treasury's examples describe three-year elections throughout, including a company whose previous three-year election expired before it made a new one. That length matters to a seasonal trade. Guiding income moves with weather, water and bookings in a way salaried income does not, and a structure chosen in a strong year has to survive a weak one. Anyone modelling this needs three seasons in the model, not one.
Electing late has an immediate price
Elect after the annual return due date and the first year's liability is due that same day.
The timing rules are strict and specific. For any three-year election made after the annual return due date of the first tax year, the taxpayer's annual liability for its first tax year is due the day it elects into the tax. Treasury's worked example describes a calendar-year filer making a new election beginning in 2024 by paying on 30 September 2025, and notes that because the election came after the 2024 annual return due date, the full 2024 liability had to be paid the day of election or attract late penalty and interest.
The one place the rules are forgiving
Estimated payments due before the election generally carry no penalty.
There is a genuine concession here, and it follows from a definition. A flow-through entity is not a taxpayer until it validly elects, so it is not required to make estimated payments that would have fallen due before the election. Effective 2 April 2025, the statute requires that interest and penalty not be assessed for any quarterly estimated payment due before the taxpayer elects. An exception may apply where the department determines the deficiency was due to intentional disregard of the law.
And the place they are not
A 10 percent penalty on a short quarter, 25 percent for paying nothing.
Once elected, catch-up is required. By the quarterly due date following its election, a taxpayer must have paid its estimated liability for that quarter plus the previous quarters of that tax year. Treasury's example puts numbers on it: a company estimating a $200,000 annual liability generally must pay at least $135,000, being $200,000 times 90 percent times three quarters, by 15 September. Fall short and a 10 percent penalty plus statutory interest is assessed on the deficiency. Pay no estimates at all for the tax year and the penalty is 25 percent. The rhythm of paying tax in instalments is the subject of how quarterly payments work for a seasonal operation.
Michigan has decoupled from parts of federal law
Public Act 24 of 2025 requires adjustments starting generally with tax year 2025.
One more moving part. Treasury states that Public Act 24 of 2025 requires Michigan taxpayers to decouple from several Internal Revenue Code provisions enacted federally, with the amendments requiring certain taxpayers to adjust reported income generally starting with tax year 2025, and it points to a specific form line for the calculation. Which provisions and what the adjustments amount to were not researched for this article. It is flagged because it means a Michigan figure and a federal figure can legitimately differ for the same year, and anybody reconciling the two should expect that rather than treat it as an error.
A boat can carry a deductible tax
Personal property taxes based only on value, charged yearly, are deductible.
The same federal topic page names this trade's main asset outright. Deductible personal property taxes are those based only on the value of personal property, such as a boat or a car, and the tax must be charged on a yearly basis even if collected more or less often than that. That is a narrow test with two conditions, value-based and annual, and a charge failing either is not in the category. Whether any particular Michigan charge on a vessel meets it was not researched here.
What is expressly not deductible
Transfer taxes on a sale, stamp taxes and federal income tax, among others.
The exclusions matter as much as the inclusions. The listed non-deductible items include federal income taxes, Social Security taxes, transfer taxes such as those imposed on the sale of property, stamp taxes, homeowners association fees, estate and inheritance taxes, service charges for water, sewer or trash collection, and taxes for local benefits unless they are for maintenance, repair or interest charges. The transfer-tax line is the one to notice when a boat or a property changes hands.
Sales tax instead of income tax
A filer may elect to deduct general sales taxes rather than state income taxes.
There is a choice inside the deduction that is easy to miss. A filer may elect to deduct state and local general sales taxes in place of state and local income taxes, by checking a box on Schedule A, and may use either actual expenses or the optional tables. A general sales tax is defined as one imposed at a single rate on retail sales of a broad range of items. For someone in a low-income-tax year who bought a boat, the arithmetic is worth running rather than assuming the income-tax route wins. All of it sits under the same overall cap.
Four years to fix a return
A taxpayer has four years from the original due date to claim a refund.
A deadline worth knowing before it passes. Treasury states that a taxpayer has four years from the due date of the original return to file and claim a refund, and gives a worked date: a 2021 Michigan return or homestead credit had to be filed on or before 18 April 2026. Four years is generous by the standards of most filing deadlines, and it means an error found in a later season is often still fixable. It also means the window closes quietly, since nothing arrives to announce it.
The workforce shrank while the rate held still
Down 86.3 thousand from the labour force, with unemployment pinned at 5.0 percent.
Michigan produced the widest gap in this series between two readings that usually move together. The civilian labour force fell in every month of the first half of 2026, from 4,992.8 thousand in January to 4,906.5 thousand in June, a drop of 86.3 thousand. Household employment fell alongside it, 4,741.1 thousand to 4,659.5 thousand. Yet the unemployment rate printed 5.0 percent in five of those six months, touching 5.1 only in May, because the count of unemployed barely moved, 251.7 thousand to 247.0 thousand. Those readings are published together on the state summary compiled by the federal labour statisticians, extracted 22 July 2026.
The guide-facing sector just crossed over
Leisure and hospitality added 7.7 thousand jobs and turned positive in June.
This is the more useful reading for anyone selling trips. Leisure and hospitality rose from 424.5 thousand jobs in January to 432.2 thousand in June, and its twelve-month comparison ran minus 1.7, minus 1.1, minus 0.6, minus 0.2, minus 1.0 and then plus 0.1 percent. So the sector spent five months smaller than a year earlier and crossed above that line in June. Total nonfarm reached 0.0 percent over twelve months at the same point. Information was the weakest sector at minus 4.7 percent, construction minus 1.8, manufacturing minus 1.2.
What none of this measures
Not one of the three sources reports a Michigan guide's income.
Worth being blunt about the limits. An entity-tax FAQ explains an election and never asks what any business earns. A federal topic page defines deductible categories and stops there. A state employment table folds 432.2 thousand leisure and hospitality jobs into one row with no occupation visible inside it. Michigan also runs several separate guiding trades that no single number covers: river work for salmon and steelhead, big-water walleye programmes, and a genuine winter season in guided ice fishing.
Why the winter season changes the structure question
A year with two seasons produces a different case for an entity than one with a gap.
No citation past this line. Michigan is one of the few states in this series where an operator can genuinely work both open water and hard water, and that changes the shape of a year. Twelve months of intermittent revenue rather than five or six months of concentrated revenue makes a business look more like a business, and it changes what a three-year commitment costs to carry. It also raises the stakes on getting the structure right early, which is the argument running through what a first season really involves.
What the entity election is actually worth
Every figure below is invented illustration built on published rates. It is not advice and it ignores the federal side of the calculation entirely.
The invented operation. Two captains running one business together, with Michigan business income of $120,000 between them.
Michigan tax on that income. At the published 4.25 percent rate, $5,100. That figure is the same whether the business elects or the members pay it themselves, which is the design Treasury describes.
So what moves? Not the Michigan number. What moves is whether that $5,100 is paid by the entity or by the individuals, and therefore how it interacts with a federal deduction capped at $40,000 combined, or $20,000 filing separately, and not reduced below $10,000.
The point. If the two captains already carry state and local taxes near that cap from property and income, the entity route is worth real money. If they are nowhere near it, the election buys them a three-year commitment and a set of quarterly penalty rules for very little. The election is worth nothing on its own; it is worth something only against a specific federal position. Work out yours with somebody qualified before restructuring anything.
Reading a Michigan year
Settle what the business is before worrying what the rate is.
The order matters more here than in most states. The rate is fixed at 4.25 percent and needs no attention. What needs attention is form: whether the operation is a sole proprietorship by default or a partnership or S corporation by choice, because that single fact decides whether an entire state tax regime is even available. Then the timing rules, which punish a late election on the first year's liability and a short quarter afterwards. Then the ordinary business questions of when an operation stops losing money at all, taken up in how long it takes a guiding business to turn.
Michigan against the others
A simple rate on top of the most complicated structural choice in the series.
Compare it with Massachusetts, where the decisive number is a holding period. There the lever is timing, and any operator can pull it. Here the lever is form, and pulling it means becoming a different kind of business for three years, on the strength of a federal provision the state does not control. Or with Maryland, where the deciding factor is a home address, which an operator can change but rarely will. Three states, three different things doing the work: form, timing and geography. None of the three charges a rate that depends on what kind of business a boat is, and none publishes anything about what a guide earns. The wider operating picture sits in the guiding business hub.
Nothing below is a quoted trip price. The percentages are published state and federal tax figures; the dollar amounts are statutory thresholds, Treasury's own worked example, and arithmetic performed on an invented two-captain business. This page does not advise anybody to change their business form, and the federal, liability and administrative consequences of becoming an LLC, partnership or S corporation were not researched here. It does not calculate anyone's federal deduction, since that depends on a modified adjusted gross income limitation and a full personal position, neither of which appears anywhere on this page. Which Internal Revenue Code provisions Michigan decoupled from was not researched, and no Michigan filing deadline, form number or licensing requirement is stated. Rates, thresholds and the federal limitation this tax depends on can all change. Take proper advice first.
How this was checked
The flow-through entity material comes from the Michigan Department of Treasury page "Flow-Through Entity Tax Frequently Asked Questions" at michigan.gov/taxes/business-taxes/flowthrough-entity-tax/frequently-asked-questions, read 27 July 2026. Taken from it: that 2021 PA 135 introduced Chapter 20 within Part 4 of the Michigan Income Tax Act effective 1 January 2021; that the tax is elected and levied on the Michigan portion of the positive business income tax base of a flow-through entity; that it allows an entity to elect to pay tax on certain income at the individual income tax rate with members then eligible for a refundable income tax credit; the department's statement that the design ensures tax on income is paid only once by collecting the same amount from the entity as would otherwise be collected from its members; that the tax is retroactive to tax years beginning on and after 1 January 2021; that its continued levy is contingent upon the existence of the federal state and local tax deduction limitation codified within IRC 164(b)(6)(B); that a flow-through entity is defined as an S corporation or a partnership under the internal revenue code; that eligible forms are LLCs filing federal returns as partnerships, partnerships including limited partnerships, limited liability partnerships and general partnerships, and S corporations; that sole proprietorships and C corporations are not eligible, with publicly traded partnerships under IRC 7704 and entities subject to the financial institutions provisions separately excluded; that for a three-year election made after the annual return due date of the first tax year the annual liability for that first year is due the day of election; that a flow-through entity is not a taxpayer until it validly elects and so is generally not required to make earlier estimated payments, with MCL 206.831(2)(b) effective 2 April 2025 requiring that interest and penalty not be assessed for quarterly estimates due before election, subject to an intentional-disregard exception; the catch-up requirement and the worked example of a $200,000 estimated annual liability requiring at least $135,000 by 15 September, with a 10 percent penalty plus statutory interest on a deficiency and a 25 percent penalty where no estimates are paid; and that PA 24 of 2025 requires decoupling from several Internal Revenue Code provisions generally starting with tax year 2025.
The Michigan rate and exemption figures come from "Tax Year 2025 Information" at michigan.gov/taxes/iit/tax-guidance/tax-year-info/tax-year-2025-guidance, read 27 July 2026: the tax rate of 4.25 percent, personal exemption of $5,800, special exemption of $3,400, qualified disabled veteran deduction of $500, and the statement that a taxpayer has four years from the due date of the original return to file and claim a refund, with the worked date of 18 April 2026 for a 2021 return. The first URL attempted on this domain returned a 404; the working paths were reached from the site's own navigation.
The federal deduction material comes from Internal Revenue Service Topic no. 503, Deductible taxes, at irs.gov/taxtopics/tc503, read 27 July 2026. Taken from it: the three deductible categories; that the overall deduction for state and local taxes on lines 5a, 5b and 5c of Schedule A is limited to a combined total of $40,000, or $20,000 married filing separately, subject to a modified adjusted gross income limitation but not reduced below $10,000; that a filer may elect to deduct state and local general sales taxes in lieu of income taxes by checking a box on Schedule A, using actual expenses or the optional tables; the definition of a general sales tax as one imposed at one rate on retail sales of a broad range of items; that deductible personal property taxes are those based only on the value of personal property such as a boat or car, charged on a yearly basis; that real property taxes must be uniform against all real property in the jurisdiction at a like rate; and the non-deductible list including federal income taxes, Social Security taxes, transfer taxes such as those on the sale of property, stamp taxes, homeowners association fees, estate and inheritance taxes, service charges for water, sewer or trash collection, and taxes for local benefits unless for maintenance, repair or interest.
What is inference rather than quotation. The observation that most single-boat guide operations default to sole proprietorship, and therefore that the typical guide is outside this election, is this page's own reading applied to Treasury's eligibility list. Treasury names the ineligible forms; it says nothing about fishing guides. The explanation of why a state would build an entity-level tax is likewise a plain-language gloss on the statute's own contingency language, not a quotation. No claim is made that electing is advantageous for any particular operation.
The labour figures come from the U.S. Bureau of Labor Statistics, Economy at a Glance: Michigan, at bls.gov/eag/eag.mi.htm, data extracted 22 July 2026, seasonally adjusted, June 2026 preliminary. The civilian labour force falling 4,992.8 to 4,906.5 thousand; household employment 4,741.1 to 4,659.5 thousand; unemployment 251.7 to 247.0 thousand; the unemployment rate series 5.0, 5.0, 5.0, 5.0, 5.1 and 5.0 percent; total nonfarm reaching 0.0 percent over twelve months by June; leisure and hospitality rising 424.5 to 432.2 thousand jobs with twelve-month changes of minus 1.7, minus 1.1, minus 0.6, minus 0.2, minus 1.0 and plus 0.1 percent; and information at minus 4.7, construction minus 1.8 and manufacturing minus 1.2 percent are read directly off that table. The 86.3 thousand and 7.7 thousand movements are arithmetic on those published figures. That page publishes no occupational earnings for fishing guides or charter captains in Michigan.
If you guide in Michigan and your phone is quieter than your fishing, I’ll build you a free preview of your booking site before you pay a cent.
Get a free website previewWorking through the Michigan election
What is Michigan's income tax rate on guiding income?
A flat 4.25 percent for tax year 2025, with a personal exemption of $5,800, a special exemption of $3,400 and a qualified disabled veteran deduction of $500. There are no brackets, so whatever a boat clears, the rate on it is the same. That makes the ordinary income side of a Michigan return one of the simplest in this series to project, and it is why this page spends its time on the part that is not simple.
What is the flow-through entity tax?
An elective second income tax, added by 2021 Public Act 135 as Chapter 20 within Part 4 of the Michigan Income Tax Act and effective from 1 January 2021. It is levied on the Michigan portion of the positive business income tax base of a flow-through entity, it lets that entity elect to pay tax on certain income at the individual income tax rate, and where it does, the members become eligible for a refundable income tax credit. Treasury describes the design as collecting the same amount from the entity as would otherwise be collected from its members.
Why would a state create a tax nobody has to pay?
Because of a federal limit sitting one level above it. An individual's deduction for state and local taxes is capped, while a business paying tax at the entity level is in a different position, so several states built a route by which the same money is paid by the business rather than the owner. Michigan does not leave this to inference: the statute states that the continued levy of the tax is contingent upon the existence of the federal state and local tax deduction limitation.
Can a single-boat guide operation use it?
Usually not, and that is the point of this page. Treasury lists the eligible forms as LLCs filing federal returns as partnerships, partnerships of every kind, and S corporations, then names who is not eligible: businesses that are not flow-through entities, such as sole proprietorships and C corporations. Most one-person guide operations are sole proprietorships, because that is the default when somebody starts selling trips without filing anything to say otherwise. Reaching this election means changing what the business is first.
How big is the federal cap it depends on?
The deduction for state and local taxes on Schedule A is limited to a combined total of $40,000, or $20,000 if married filing separately, subject to a modified adjusted gross income limitation but not reduced below $10,000. Whether the Michigan election is worth anything to a particular operator depends entirely on where they sit against that number. If their state and local taxes are already near it, the entity route matters. If they are nowhere near it, the election buys a three-year commitment for very little.
What happens if I elect late?
The first year's bill arrives immediately. For any three-year election made after the annual return due date of the first tax year, the annual liability for that first year is due the day of election. Treasury's example is a calendar-year filer electing on 30 September 2025 for tax year 2024, who had to pay the full 2024 liability that same day or face late penalty and interest. There is a concession on the other side: an entity is not a taxpayer until it validly elects, so quarterly estimates due before the election generally carry no penalty.
And once I am in?
Catch-up is required and the penalties are steep. By the quarterly due date following election, the taxpayer must have paid the estimated liability for that quarter plus the previous quarters of the year. Treasury's worked example has a company estimating $200,000 for the year needing at least $135,000 paid by 15 September, being $200,000 times 90 percent times three quarters. A shortfall draws a 10 percent penalty plus statutory interest, and paying no estimates at all for the year draws 25 percent.
What is the market doing?
Two readings that usually move together came apart. The civilian labour force fell every month of the first half of 2026, from 4,992.8 thousand to 4,906.5 thousand, a drop of 86.3 thousand, yet the unemployment rate printed 5.0 percent in five of those six months because the count of unemployed barely moved. The guide-facing sector did better: leisure and hospitality rose from 424.5 thousand jobs to 432.2 thousand and its twelve-month change crossed from negative to plus 0.1 percent in June.
Sources & methods
- Flow-Through Entity Tax Frequently Asked Questions, read 27 July 2026 (Michigan Department of Treasury)
- Tax Year 2025 Information, read 27 July 2026 (Michigan Department of Treasury)
- Topic no. 503, Deductible taxes, read 27 July 2026 (Internal Revenue Service)
- Economy at a Glance: Michigan, data extracted 22 July 2026 (U.S. Bureau of Labor Statistics)
Every figure here is traced to a named public source and checked against it. Licensing, tax, and fee rules change. Verify your state’s current rules with the agency directly before you count on any number here.
Evan Knox
I build booking websites and run the ads and search for owner-run fishing guides, one operation per stretch of water. My first guide client, Bowman Fly Fishing, grew its revenue 4x in a year from that work. Field Notes is where I put the straight numbers on the business of guiding.
More field notes
How Much Do Fishing Guides Make in Massachusetts?
14 min readBusinessSole Proprietor vs LLC for Guides
29 min readGuide incomeHow Much Do Ice Fishing Guides Make?
12 min readGuide incomeHow Much Do Fishing Guides Make in Colorado?
12 min readGuide incomeHow Much Do Fishing Guides Make in Alabama?
12 min readTwo seasons a year is two chances to fill the calendar.
I'm Evan, and I work the part of guiding that fills open dates: booking sites, plus the search and ads that put good guides in front of anglers, with published pricing and one operation per stretch of water. If you run trips in Michigan on open water or hard water and want both seasons booked, text me at (470) 777-9686 and I'll put a free preview together before any money moves.