Montana has a progressive state income tax with rates ranging from 4.7% to 5.9%. Montana is also one of five states with no statewide sales tax, making income tax the primary source of state revenue.
Montana Tax Brackets (2026)
| Taxable Income | Tax Rate |
|---|---|
| $0 - $20,500 | 4.7% |
| $20,500+ | 5.9% |
Montana simplified its tax structure in 2024, reducing from multiple brackets to just two. These figures are based on Montana Department of Revenue guidelines.
What You'll See on Your Paystub
A Montana worker's paystub includes both federal income tax withholding and state deductions:
| Deduction | Rate | Notes |
|---|---|---|
| Federal Income Tax | Varies | Based on W-4 and income |
| Social Security | 6.2% | Up to $181,200 wage base |
| Medicare | 1.45% | No wage limit |
| Montana State Income Tax | 4.7% - 5.9% | Based on income level |
Montana Standard Deduction
Montana offers a standard deduction that reduces your taxable income:
| Filing Status | Standard Deduction (2026) |
|---|---|
| Single | $5,540 |
| Married Filing Jointly | $11,080 |
| Head of Household | $8,310 |
No Sales Tax
Montana is one of five states with no statewide sales tax:
- More purchasing power for your take-home pay
- Some resort communities may charge local resort taxes
- State relies more heavily on income and property taxes
Montana's lack of sales tax, combined with moderate income tax rates, makes it attractive for retirees and remote workers.
No Local Income Taxes
Montana does not allow cities or counties to impose local income taxes. Your state withholding covers all Montana income tax obligations.
Montana SUTA
Employers in Montana pay State Unemployment Tax (SUTA):
- Rate: Varies by employer experience rating
- Wage base: First $43,000 per employee (2026)
- Paid by: Employers only (no employee contribution)
Comparing Take-Home Pay
Here's how a $75,000 annual salary in Montana compares to other states:
| State | Effective Rate | Annual State Tax |
|---|---|---|
| Montana | ~5.5% | ~$3,800 |
| Idaho | ~4.7% | ~$3,500 |
| South Dakota | 0% | $0 |
Remote Work in Montana
Montana has become popular for remote workers due to:
- No sales tax on purchases
- Moderate income tax rates
- Lower cost of living than coastal states
- Quality of life and outdoor recreation
If you work remotely for an out-of-state employer, you generally pay Montana income tax on wages earned while physically in Montana.