Key Tax Facts: Montana
- No state sales tax - one of only five states without one
- Flat 5.9% rate starting 2024 (was graduated up to 6.75%)
- Pension income exemption up to $4,370 for eligible retirees
- Capital gains taxed at a reduced rate with 2% credit
Estimate Your 2026 Federal and Montana State Income Tax
Montana State Income Tax Overview
Montana imposes a graduated income tax with two brackets: 4.7% on income up to $21,100 for single filers and 5.9% above that. A 2021 reform replaced the previous seven-bracket ladder, which topped out at 6.75%, and Montana now uses the federal taxable income starting point, so the federal standard deduction of $15,000 for single filers and $30,000 for joint filers carries through. Montana allows a credit for income taxes paid to other states and provides a capital gains credit on qualifying net long-term capital gains. Social Security income is not taxed below certain income thresholds. Montana has no general sales tax, which is a meaningful offset to its income tax.
What Is Different About Montana's Income Tax
Deductions and exemptions
Montana restructured its tax for 2024, adopting the federal standard deduction and two brackets. The former deduction for federal income tax paid was repealed. Itemizers follow federal Schedule A with state modifications, and Montana has no sales tax, which is its defining feature for residents and visitors.
Credits worth knowing
Montana's earned income credit is 10% of the federal credit. The elderly homeowner and renter credit refunds part of property tax or rent for residents 62 and older with limited income, and there is a credit for taxes paid to other states and a child and dependent care deduction.
Retirement, capital gains, and other income
Social Security is taxed under rules similar to the federal formula, with a partial exemption at lower incomes. Taxpayers 65 and older can subtract up to $5,500 of income. Military retirement pay is partially exempt for retirees who moved to Montana after 2023. Montana taxes net long-term capital gains at reduced rates of 3.0% and 4.1% rather than the ordinary 4.7% and 5.9%.
Rules summarized from the Montana Department of Revenue guidance for tax year 2026. Amounts that index annually are described in general terms; confirm the current figure on the official form instructions.
Montana Income Tax Brackets (2026) projected
These are the Montana state income tax brackets for tax year 2026. Montana applies the same brackets to all filing statuses, carried forward from 2025 pending official 2026 figures. Only the income within each bracket is taxed at that rate -- not your entire income.
| Taxable Income | Tax Rate |
|---|---|
| $0 - $21,100 | 4.7% |
| Over $21,100 | 5.9% |
Source: Montana Department of Revenue. Montana applies these brackets to all filing statuses.
What a Montana Resident Actually Pays: A Worked Example
Your effective tax rate is almost always lower than your top bracket. Here is how the math works for a single filer earning $65,000.
Where Montana Stands Among the 50 States
Montana's top rate of 5.9% ranks #15 of the 41 states that tax wages. The median top rate across those 41 states is 5.2%, so Montana is above the middle of the pack. It is one of 27 states with a graduated schedule, using 2 brackets; the top rate starts at $21,100 of taxable income, and the lowest bracket ends at $21,100.
On sales tax the picture is different: Montana's combined state and average local rate of 0% ranks #48 of 50, against a national median of 7.00%.
Montana State Tax at Five Income Levels (2026, single filer)
| Taxable income | Montana tax | Effective rate | Marginal rate |
|---|---|---|---|
| $40,000 | $2,107 | 5.27% | 5.9% |
| $65,000 | $3,582 | 5.51% | 5.9% |
| $100,000 | $5,647 | 5.65% | 5.9% |
| $150,000 | $8,597 | 5.73% | 5.9% |
| $250,000 | $14,497 | 5.80% | 5.9% |
Brackets applied directly to the taxable-income figure shown, before Montana-specific deductions, exemptions, or credits. Federal tax is separate and comes on top of every row.
Montana vs. Its Neighbors on $75,000 of Taxable Income
A Montana resident with $75,000 of taxable income pays about $4,172 in state income tax. Of Montana's 4 neighboring states, 4 would tax that income less and 0 would tax it more -- Montana is the most expensive state in its region on this measure.
| State | Structure | Tax on $75,000 | Top rate | Sales tax |
|---|---|---|---|---|
| Montana (you) | Graduated | $4,172 | 5.9% | 0% |
| South Dakota | No income tax | $0 | None | 6.11% |
| Wyoming | No income tax | $0 | None | 5.36% |
| North Dakota | Rate to 2.5% | $517 | 2.5% | 6.96% |
| Idaho | Rate to 5.3% | $3,975 | 5.3% | 6.02% |
Frequently Asked Questions -- Montana Income Tax
Does Montana have a state income tax?
Yes. Montana imposes a state income tax with a top marginal rate of 5.9%. This is separate from your federal income tax obligation.
What is the Montana income tax rate for 2026?
Montana uses a graduated income tax system with rates from 4.7% to 5.9%. Only the income within each bracket is taxed at that bracket's rate -- not your entire income.
Do I have to file a Montana state tax return?
Most full-year Montana residents with income above the state filing threshold must file a state return. Check the Montana Department of Revenue for current thresholds and requirements.
How accurate is this estimate?
The federal figure uses the official IRS 2026 brackets and standard deduction. The Montana figure applies the 2026 single-filer rate schedule to the same taxable income; it does not model Montana-specific deductions, exemptions, credits, or local income taxes, so treat it as a planning number and confirm with the Montana Department of Revenue or a tax professional before filing.
How does Montana compare with nearby states?
On $75,000 of taxable income, Montana collects about $4,172. South Dakota collects $0, Wyoming collects $0, North Dakota collects $517, Idaho collects $3,975. See the comparison table above.
Where does Montana rank on state income tax?
Montana's top rate of 5.9% ranks #15 of the 41 states with an income tax, against a median top rate of 5.2%. Its combined sales tax of 0% ranks #48 of 50.
Does this calculator include federal income tax?
Yes. It estimates your 2026 federal income tax using the official IRS 2026 brackets, then applies the Montana rate schedule to the same taxable income and shows both figures plus the combined total.
Where can I find official Montana tax forms?
Official forms, instructions, and filing guidance are available at the Montana Department of Revenue.
What is the sales tax rate in Montana?
Montana's combined state and average local sales tax rate is 0%. This is separate from income tax and applies to most retail purchases -- use our sales tax calculator to check a specific purchase.
When are Montana 2026 state taxes due?
2026 taxes are generally filed in 2027. The Montana filing deadline is April 15, 2027, the same as the federal deadline.
Understanding Your Montana Tax Estimate
Your results combine two separate bills: federal tax owed to the IRS, and Montana state tax owed to the Montana Department of Revenue. The state return is filed separately from your federal Form 1040, with a state filing deadline of April 15. For the mechanics of how bracket math actually works -- why your effective rate is almost always lower than your top bracket -- see our marginal vs. effective tax rate guide.
Lowering Your Montana Bill
Pre-tax retirement contributions reduce your federal and Montana taxable income in the same move -- see our 401(k) contribution limits and HSA limits guides for the current caps. Beyond that, Montana-specific credits and deductions that don't exist at the federal level are listed at the Montana Department of Revenue -- worth checking, since these are easy to miss if you only look at federal guidance.
Combined Sales + Income Tax Picture
Montana's combined state-plus-average-local sales tax rate is 0%. If you're self-employed, that's an added layer on top of income tax -- our self-employment tax calculator covers the SE-specific piece separately.
Disclaimer: Estimates for educational purposes only. State tax results are approximations based on published bracket data and do not account for all deductions, credits, exemptions, local taxes, or individual situations. Not tax, legal, or financial advice. Consult the Montana Department of Revenue or a qualified tax professional for guidance specific to your situation.