Montana Income Tax Calculator 2026

Montana income tax brackets explained

Montana has two income tax rates for 2026: 4.7% on the first $47,500 of taxable income for single filers ($95,000 for joint filers, $71,250 for heads of household) and 5.65% on everything above. The top rate was 5.9% until HB 337 cut it on January 1, 2026.

The key thing to understand is where Montana starts. Since Montana’s tax simplification, Montana taxable income begins with your federal taxable income (not counting the federal qualified business income deduction). There is no separate Montana standard deduction or personal exemption: whatever deduction you take on your federal return carries straight into Montana.

Worked example: $85,000 single filer

A single filer with $85,000 of wages and no other adjustments has federal taxable income of $68,900 after the $16,100 federal standard deduction. Montana taxes that amount as follows:

• Montana tax: $3,442, an effective rate of 4.05% of gross wages.
• Federal income tax on the same wages: $9,870.
• Because the first $47,500 is taxed at 4.7%, the top rate of 5.65% only touches the last $21,400 of taxable income.

Montana deductions, subtractions and credits

Starting from federal taxable income removed many old Montana-only deductions, but several adjustments remain. These are the ones most households run into:

• Age 65+ subtraction: a standard subtraction of $5,500 for each taxpayer 65 or older ($11,000 if both spouses are 65 or older on a joint return).
• Capital gains: long-term capital gains are taxed at lower Montana rates of 3.0% and 4.1% instead of ordinary rates.
• Montana earned income tax credit: 20% of your federal EITC starting in 2026.
• Military retirees who meet the criteria can claim the Working Military Retirement and Survivor Benefit Exemption.
• Repealed: the old partial pension and IRA deductions no longer exist, so pension and IRA income is taxed to the extent it is in federal taxable income.

How Montana taxes Social Security and retirement income

Montana taxes Social Security benefits to the same extent they are included in federal taxable income. If none of your benefits are federally taxable — which happens when your combined income is below the federal base amount of $25,000 for single filers or $32,000 for joint filers — Montana does not tax them either. Above those thresholds, up to 85% of benefits can be federally taxable, and that amount flows into Montana.

For most retirees the age-65 subtraction is now the main state-level relief, replacing the pension and IRA deductions that were repealed.

Filing your Montana return

Residents and part-year residents file Form 2, the Montana Individual Income Tax Return. The return is due April 15, with an extension deadline of October 15. Payments can be sent with Form IT.

Montana now requires you to use the same filing status as on your federal return, so married couples can no longer file separately in Montana while filing jointly with the IRS. Enrolled tribal members with income exempt under federal law use Form ETM to certify it.

• Moving in or out mid-year? Check the Department’s Montana residency guidance before filing Form 2, since part-year residents are taxed differently on income earned before and after the move.
• Rate changes in 2026 first show up on the 2026 Form 2 filed in 2027.