Montana · the numbers
Montana figures at a glance, 2026
The Montana numbers for the 2026 return in one place: the two rates and where they change, the capital gains rates, the subtractions, the credits, the estimated-payment rules, the property tax rates and the dates. Each with a one-line note, and a short list of what changed from 2025. For anyone who files here, and anyone checking a preparer’s work.
By Charles Trautman, EA, editor
Need to Know Tax · written from Montana Department of Revenue sources, November 3, 2026; updated November 12, 2026 after the election · not yet reviewed by a Montana practitioner
Montana has few numbers of its own because the return borrows most of them from the federal one. Form 2 starts from federal taxable income, so the standard deduction, the itemized deductions and the 2025 federal deductions for tips, overtime, seniors and car-loan interest are all federal figures that simply flow in. What Montana sets itself is short: two rates, 4.7% and 5.65%, and the lines between them; two capital gains rates, 3% and 4.1%; an age-65 subtraction; a 529 subtraction; an earned income credit at 20% of the federal one; and a $500 estimated-payment threshold. Most of those moved for 2026, which makes this a year to check every figure against last year’s.
Rates and brackets
| Item | 2025 | 2026 | Note |
|---|---|---|---|
| Lower rate | 4.7% | 4.7% | On Montana ordinary income up to the bracket line |
| Top rate | 5.9% | 5.65% | Falls to 5.4% for 2027 under HB 337 |
| Bracket line, single and married separate | $21,100 | $47,500 | $65,000 for 2027; estates and trusts use this column |
| Bracket line, head of household | $31,700 | $71,250 | $97,500 for 2027 |
| Bracket line, married joint and surviving spouse | $42,200 | $95,000 | $130,000 for 2027 |
| Net long-term capital gains, lower rate | 3% | 3% | On gains that fit under the bracket line after ordinary income |
| Net long-term capital gains, upper rate | 4.1% | 4.1% | On the rest; all gains if ordinary income is already over the line |
| Starting point | Federal taxable income | Federal taxable income | Federal AGI less Form 1040 lines 12e and 13b on the 2025 forms; QBI deduction excluded |
| Montana standard deduction or personal exemption | None | None | The federal standard deduction flows through instead |
| Local income tax | None | None | No city, county or school district levies one |
“Montana ordinary income” is Montana taxable income without net long-term capital gains. The 2025 column is from the Department’s 2025 tax tables; the 2026 column from its HB 337 notice and Publication 1, 2026 edition.
Subtractions and the federal deductions that flow through
| Item | 2025 | 2026 | Note |
|---|---|---|---|
| Federal standard deduction, single / head of household / joint | $15,750 / $23,625 / $31,500 | $16,100 / $24,150 / $32,200 | Federal figures; reach Montana through Form 2 line 2 |
| Federal senior deduction, per person 65 or older | $6,000 | $6,000 | Federal; flows through to Montana |
| Age-65 subtraction, per person | $5,660 | to come ($5,660 in Publication 1) (verify) | Montana’s own; indexed; $11,320 joint if both 65 or older. Schedule I |
| 529 contribution subtraction, per taxpayer / joint | $4,500 / $9,000 | $4,600 / $9,200 (verify) | Any state’s plan; Department’s 529 page says $4,600, Publication 1 still shows $4,500 |
| ABLE (529A) contribution subtraction, per taxpayer / joint | $3,000 / $6,000 | $3,000 / $6,000 | Publication 1, 2026 edition |
| Medical Care Savings Account contribution | $4,600 | to come | Indexed; 2025 figure from the Department’s 2025 tables |
| Volunteer firefighter / emergency care provider subtraction | None | $3,000 | New for 2026 under HB 129; indexed after that |
| Railroad Retirement Tier I and II | Exempt | Exempt | Schedule I subtraction |
| Active-duty military pay | Exempt | Exempt | Basic, special and incentive pay |
| Working Military Retirement Exemption | 50% of retirement pay (verify) | 50% of retirement pay | Form WMRE; five years; limited by Montana earned income; expiration removed by SB 93 |
| Pension, annuity, IRA exclusion | None | None | Ended after 2023; retirement income taxed in full |
| Social Security | Federal taxable amount | Federal taxable amount | No Montana worksheet since 2024 |
| State income tax add-back for itemizers | Schedule I line 4 | Schedule I line 4 | Only to the extent itemized deductions exceed the standard deduction; Worksheet B |
Credits
| Credit | Figure | Refundable? | Note |
|---|---|---|---|
| Earned income credit | 20% of the federal EITC | Yes | 10% for 2025; Worksheet A; residents only, part-year prorated |
| Elderly Homeowner/Renter Credit | Up to $1,150 (verify 2026) | Yes | Age 62+, household income under $45,000; Schedule 2EC, or alone through TAP |
| Credit for tax paid to another state | Lesser of the other state’s tax or Montana tax on the same income | No | Schedule III; no carryover; local taxes do not count |
| Qualified Endowment Credit | 40% of the present value of a planned gift, up to $15,000 (verify) | No | Form QEC; Montana endowments only |
| Child tax credit | None | Montana has no state child credit | |
| Child and dependent care credit | None | The old Form 2441-M deduction ended with 2024 |
A list of smaller nonrefundable credits (apprenticeship, trades education, historic preservation, recycling, media, adoption and others) is in the Form 2 instructions. The Department’s EITC web page still said 10% when this was written; the HB 337 notice and Publication 1 give 20% for 2026.
Worked example: the two rate schedules side by side
Married filing jointly, 2026. Montana ordinary income of $70,000 after the federal deductions, and a $40,000 net long-term gain from selling stock held for years. The gain is taxed on its own schedule.
| Ordinary income at 4.7% (all of it is under the $95,000 line) | $3,290 |
| Room left under the line: $95,000 − $70,000 | $25,000 |
| Long-term gain at 3%, on $25,000 | $750 |
| Long-term gain at 4.1%, on the other $15,000 | $615 |
| Montana tax | $4,655 |
Under the 2025 brackets the same couple would have paid 5.9% on ordinary income above $42,200 and 4.1% on the entire gain, since ordinary income was already past the line: $3,624 on ordinary income and $1,640 on the gain, $5,264 in all. HB 337 saves them $609. Had the $40,000 been a short-term gain it would be ordinary income, and the last $15,000 would be taxed at 5.65%.
Paying in
| Item | 2026 | Note |
|---|---|---|
| Estimated payments required when tax after withholding and nonrefundable credits exceeds | $500 | Publication 1 |
| Safe harbor | 100% of 2025 tax, or 90% of 2026 tax | Four equal installments of the lesser; no 110% rule for higher incomes |
| Estimated payment dates | Apr 15, Jun 15, Sep 15, 2026; Jan 15, 2027 | Next business day if a weekend or holiday |
| Excused from estimates | Retired at 62 or older (that year and the next); became disabled; two-thirds of income from farming or ranching | Also anyone with no Montana return or no Montana tax for 2025 |
| Interest on underpayments and late payments | 7% | 8% in 2025; figured daily; 2027 rate to come |
| Late-payment penalty | 0.5% a month, up to 12% | 1.5% a month, up to 15%, on underpaid estimates |
| Late-filing penalty | Greater of $50 or 5% a month, up to 25% | Avoided by filing within the automatic six-month extension |
| Withholding certificate | Form MW-4 | Federal W-4 not accepted for Montana |
| Pass-through entity tax and mineral royalty withholding rate | 5.65% | Tracks the top rate |
| Payments that must be made electronically | $50,000 or more | Form IT voucher |
Beyond the income tax
| Item | 2026 |
|---|---|
| Homestead property tax rate (principal residence 7+ months, or long-term rental) | 0.76% of market value to $378,000; 0.90% to $756,000; 1.10% to $1,511,999; 1.90% above $1,512,000 |
| Second homes, short-term rentals, vacant residential lots | 1.90% flat |
| 2026 Property Tax Refund (homes that missed the homestead rate) | Difference between 1.90% and the homestead rate; request in TAP January 1 to May 31, 2027 |
| Enrollment deadline for the 2027 homestead rate | March 1, 2027 |
| Property tax rebate | None for 2026; the 2025 rebate of up to $400 was one-time |
| General sales tax | None, state or local; resort towns levy a local resort tax of up to 3% |
| Estate, inheritance or gift tax | None |
| Reciprocal state for wages | North Dakota only; claim on Form MW-4 |
What changed from 2025
- Top rate 5.65%, down from 5.9%. It falls again to 5.4% for 2027.
- The 4.7% bracket more than doubled: $47,500 / $71,250 / $95,000 for single, head of household and joint, from $21,100 / $31,700 / $42,200. The 3% capital gains band widened to match.
- Montana EITC 20% of federal, from 10%.
- 529 subtraction $4,600 / $9,200, from $4,500 / $9,000.
- New $3,000 volunteer firefighter and emergency care provider subtraction.
- Interest rate 7%, from 8%.
- Federal law changes flowed through: tips, overtime, senior and car-loan deductions, larger standard deduction, $40,000 SALT cap for itemizers, 100% bonus depreciation. QBI deduction still excluded.
- Property tax: homestead tiered rate replaces the rebate; 1.90% on second homes and short-term rentals.
- Unchanged: 4.7% lower rate; 3% and 4.1% capital gains rates; no pension exclusion; Social Security taxed as federal; $500 estimated-payment threshold; no child credit, no dependent care credit; no local income tax; no sales tax.
Behind the scenes: why so many figures are “to come”
Montana publishes its indexed figures in the Form 2 instructions, which usually appear in late December. The Department’s Publication 1 for 2026, written for estimated payments, is the earliest 2026 document, and it repeats several 2025 figures, including the $5,660 age-65 subtraction and the $4,500 529 limit, that the Department’s own 529 page has since moved to $4,600. The safe reading is that Publication 1 was prepared before the indexing was done. Any figure in this table marked “to come” or flagged for verification should be checked against the 2026 Form 2 instructions when they are posted, and against the HB 337 notice for the rates, which are set in statute and will not move.
What to bring
- Last year’s Form 2, for line-by-line comparison and the 100% safe harbor
- Dates of birth, for the federal senior deduction and the Montana age-65 subtraction
- Brokerage 1099-B with long-term and short-term gains separated
- 529 and ABLE contribution statements
- Estimated payment confirmations from TAP, with dates
- The 2026 property tax bill, to confirm the homestead rate
- For a business, farm or rental: the federal depreciation schedule
Questions people ask
What are the Montana tax rates for 2026?
4.7% on Montana ordinary income up to $47,500 single, $71,250 head of household or $95,000 joint, and 5.65% above that. Net long-term capital gains are taxed at 3% and 4.1% instead.
Does Montana have a standard deduction?
Not its own. Montana starts from federal taxable income, so the federal standard deduction, $32,200 joint for 2026, has already come off. There is no Montana personal or dependent exemption either.
What is the age-65 subtraction for 2026?
$5,660 per person for 2025, and the Department’s 2026 estimated-tax publication repeats $5,660. The subtraction is indexed, so the final 2026 figure will be in the 2026 Form 2 instructions (verify).
How much is the Montana EITC?
20% of the federal earned income credit for 2026, refundable. It was 10% for 2025.
When do I have to make estimated payments?
When Montana tax after withholding and nonrefundable credits will exceed $500. Paying 100% of 2025 tax or 90% of 2026 tax in four equal installments avoids interest, which is 7% for 2026. Retirees 62 or older are excused the year they retire and the next.
Is there a Montana estate tax?
No estate, inheritance or gift tax. The federal estate tax is the only one that applies.
Two rates, two capital gains rates, and the federal deductions do the rest
Know where the $47,500, $71,250 or $95,000 line falls for your household, and most of the 2026 Montana arithmetic is done.
Written by Charles Trautman, EA, editor · Need to Know Tax, Lone Tree, Colorado
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Forms and official pages named in this article
- Form 2, Montana Individual Income Tax Return, with Schedules I, II, III and 2EC
- 2025 Form 2 instructions
- Form MW-4, Montana Employee’s Withholding Allowance and Exemption Certificate
- Form IT, Individual Income Tax Payment Voucher
- Form EST-I, Underpayment of Estimated Tax
- Elderly Homeowner/Renter Credit, Schedule 2EC
- 2026 Property Tax Refund
Sources and where to check
- Montana Department of Revenue: HB 337, Individual Income Tax Changes for 2026 and 2027
- Montana Department of Revenue: Publication 1, Prepaying Income Tax in Montana, 2026 edition
- Montana Department of Revenue: 2025 Tax Rates and Deductions
- Montana Department of Revenue: Family Education Savings Account (529) subtraction
- Montana Department of Revenue: Montana Earned Income Tax Credit
- Montana Department of Revenue: Penalties and Interest
- Montana Department of Revenue: 2026 Tax Information for Montana Property Owners
- Montana Department of Revenue: Form 2 instructions by year (2026 edition to be posted)