Montana income tax rates and brackets for 2025 and 2026

Montana taxes ordinary income at 4.7% up to a threshold and at its top rate above it. For 2025 the top rate is 5.9%. House Bill 337 of the 2025 session, as the Department of Revenue (DOR) explained in November 2025, lowers the top rate to 5.65% for 2026 and 5.4% for 2027 and raises the threshold where it starts. DOR’s 2026 withholding tables already use 5.65%.

Long-term capital gains are taxed separately, at 3.0% and 4.1%, using the same thresholds; qualified dividends count as ordinary income. From 2027 the brackets rise with inflation each year.

Since 2024 a Montana return starts from federal taxable income, then adds and subtracts Montana items. Montana no longer has its own standard deduction or personal exemptions; your federal standard or itemized deduction carries over, though the federal qualified business income deduction is added back. People 65 and older get a Montana subtraction of $5,660 each for 2025.

For example, a single filer with $60,000 of wages for 2025 has $44,250 of federal taxable income after the $15,750 standard deduction. Montana tax is 4.7% of the first $21,100 plus 5.9% of the rest, about $2,358. For 2026, with the $16,100 federal standard deduction, taxable income is $43,900, all inside the wider 4.7% bracket: about $2,063.

Because Montana starts from federal taxable income and defines the Internal Revenue Code as amended, the July 2025 federal deductions carry through. DOR’s 2025 instructions say the additional deductions on federal Schedule 1-A, for qualified tips (up to $25,000), overtime pay (up to $12,500, or $25,000 joint), car loan interest (up to $10,000) and the $6,000 senior deduction, reduce Montana taxable income too. Montana’s 2025 legislative session ended before the federal law passed, so no Montana bill changed this; DOR has not yet published its 2026 forms.

Montana taxes more retirement income than most of its neighbors.

Montana has no state child tax credit. Separately from the income tax, homeowners who qualified for the 2026 homestead property tax rate but did not enroll can apply for a property tax refund from January 1 to May 31, 2027.

Montana follows the federal filing requirement: residents, part-year residents and nonresidents with Montana income file Form 2 if they must file a federal return. Everyone uses Form 2; part-year residents and nonresidents add Schedule II. Montana has no local income tax: state law bars cities and counties from levying one unless the legislature delegates the power, and it has not.

2025 returns were due April 15, 2026, and 2026 returns are due April 15, 2027. Montana gives an automatic six-month extension to file, to October 15, with no form, but tax is due by April 15.

Check a Montana refund with “Where’s My Refund” on DOR’s TransAction Portal (TAP). It asks for your filing status, Social Security number and expected refund amount, shows approval, denial and amount, and updates each weeknight.

DOR says it can take up to 90 days to issue a refund; status for an e-filed return may be available about two weeks after filing, and for a paper return much later. First-time Montana filers receive a paper check rather than direct deposit, and DOR may send a letter asking you to verify your identity.

Montana and North Dakota have a reciprocal agreement for wages: a Montana resident working in North Dakota pays Montana tax instead of North Dakota tax on that pay, and the same works in reverse. It covers wages only. Montana residents who pay income tax to other states claim the Schedule III credit.

You are a Montana resident if Montana is your domicile or you keep a permanent home here, and Montana taxes all of a resident’s income. Part-year residents and nonresidents pay Montana tax on Montana-source income. Enrolled tribal members who live on their own reservation can subtract income earned there.