Montana’s state income tax is based on a graduated tax system, which means you’re subject to tax brackets where your tax rate increases as your income increases. Factors such as your filing status, income level, and residency determine how much you’ll pay in taxes.
For the 2024 tax year (the return you file in 2025), Montana’s Income Tax Simplification bill introduced updates aimed at streamlining calculations and ensuring fairness for taxpayers across the state.
This guide will walk you through what you need to know to confidently file your Montana state income taxes in 2025, including the state’s tax rates and available deductions and credits.
*Note you are still responsible for federal taxes if you meet the IRS income filing threshold. This article addresses state-specific taxes only.
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Montana state income tax ratesWhat is the standard deduction in Montana?Who has to file Montana state income tax?Other income tax considerations in MontanaTalk to a tax expert for freeCommon Montana state income tax creditsHow to file Montana state income taxMontana state income tax rates
Montana’s graduated system involves tax rates of 4.7% and 5.9%. Taxpayers with lower taxable incomes are subject to the 4.7% rate, while higher earners fall into the 5.9% bracket. These rates apply to all income earned within the Treasure State, including wages, investments, and business earnings.
Montana state taxes for the 2024 tax year (filed in 2025) are due by April 15, 2025. Filing early helps avoid penalties and gives you peace of mind knowing your taxes are complete.
The table below breaks down how Montana state income tax rates apply based on filing status and taxable income:
| Filing status | Taxable income (without net long-term capital gains) | Tax rate |
| Single Married filing separately | $0 to $20,500 | 4.7% |
| More than $20,500 | 5.9% | |
| Head of household | $0 to $30,750 | 4.7% |
| More than $30,750 | 5.9% | |
| Married filing jointly Qualified surviving spouse | $0 to $41,000 | 4.7% |
| More than $41,000 | 5.9% |
Source: Montana Department of Revenue
What is the standard deduction in Montana?
Montana no longer offers a separate state-specific standard deduction. Instead, your Montana taxable income starts with your federal taxable income as a base.
However, Montana provides specific deductions, such as a $5,500 exemption for taxpayers aged 65 and older and a $4,500 deduction for contributions to a medical savings account (MSA).
Who has to file Montana state income tax?
Montana state income tax filing requirements depend on your residency status (resident, part-year resident, or nonresident), adjusted gross income (AGI), and filing status.
Generally, you must file a Montana state return if during the tax year, you were a resident or part-year resident of Montana, or a nonresident who received income from Montana sources, and your federal gross income, excluding unemployment compensation, meets the state’s filing threshold. Even if you’re not obligated to file federally but have a Montana addition or subtraction to your income, you may have to file a state income tax return.
According to the state’s 2024 individual income tax instructions, Montana’s tax filing requirements for income follow federal tax filing requirements after considering any Montana additions and subtractions to federal taxable income. For 2024, the federal gross income thresholds for filing are:
| Filing status | Age | Gross income threshold |
| Single | Under 65 | $14,600 |
| 65 or older | $16,550 | |
| Married filing jointly | Both under 65 | $29,200 |
| One spouse 65 or older | $30,750 | |
| Both 65 or older | $32,300 | |
| Married filing separately | Any age | $5 |
| Head of household | Under 65 | $21,900 |
| 65 or older | $23,850 | |
| Qualifying surviving spouse | Under 65 | $29,200 |
| 65 or older | $30,750 |
Source: Internal Revenue Service
Still not sure whether you have to file a Montana state income tax return? Don’t worry. TurboTax can guide you through every step of the process and help you determine whether you need to file. And expert help is always available.
How Montana residency impacts tax filing
Montana state income tax filing relies on three residency statuses: resident, part-year resident, and nonresident. Each status determines how your income is taxed and the forms you must file.
Residents must report all income, while part-year and nonresidents only report income sourced from Montana. The table below breaks down Montana’s residency statuses and how they impact state income tax filing:
| Residency status | Definition | How Montana taxes income |
| Resident | You lived in Montana for the entire tax year, or Montana is your permanent home. | Montana taxes all income earned in and outside the state. |
| Part-year resident | You lived in Montana for part of the tax year and established residency or moved out of the state. | Montana taxes income earned while a resident and any Montana-sourced income earned while a nonresident. |
| Nonresident | You lived outside Montana during the tax year but earned income from Montana sources. | Montana only taxes income earned from Montana sources. |
Other income tax considerations in Montana
Montana taxes different types of income in unique ways, offering specific exemptions and lower tax rates in some cases. Below is a breakdown of how various income types are treated:
Retirement and pension income tax
Taxed as ordinary income. Taxpayers aged 65 and over receive a $5,500 subtraction from federal taxable income.
Investment income tax
Capital gains are taxed at a lower rate than ordinary income. This table breaks it down:
| Filing status | Net long-term capital gains | Tax rate |
| Single and married filing separately | First $21,100 of capital gains minus Montana ordinary income | 3% |
| Net long-term capital gains that exceed $20,500 minus Montana ordinary income | 4.1% | |
| If Montana ordinary income exceeds $20,500 | 4.1% | |
| Married filing jointly and qualified surviving spouse | First $42,200 of capital gains minus Montana ordinary income | 3% |
| Net long-term capital gains that exceed $41,000 minus Montana ordinary income | 4.1% | |
| If Montana ordinary income exceeds $41,000 | 4.1% | |
| Head of household | First $31,700 of capital gains minus Montana ordinary income | 3% |
| Net long-term capital gains that exceed $30,750 minus Montana ordinary income | 4.1% | |
| If Montana ordinary income exceeds $30,750 | 4.1% |
Source: Montana Department of Revenue
Social Security income tax
Taxed the same as the federal level.
Military income tax
Active-duty and combat pay is exempt. Nonresidents stationed in Montana file only if they earn civilian income. Military retirement pay is taxable in Montana; however, beginning with tax year 2024, Montana resident military retirees working in the state may be eligible for an exemption of part of their military retirement income.
Native American income taxes
Enrolled tribal members living on their reservation can take exemptions on specific income.
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Common Montana state income tax credits
Montana offers several deductions and credits to help reduce your taxable income or directly lower your tax bill. Below is a summary of key options:
| Tax credit | Description | Amount |
| Credit for Income Taxes Paid to Another State | Offsets taxes paid to other states to avoid double taxation. | Equal to taxes paid in the other state. Note: Montana and North Dakota have a reciprocal agreement. |
| Innovative Educational Program Tax Credit | Credit for donations to innovative educational programs in Montana public school districts. | Up to $200,000 on a first-come, first-serve basis until annual credit threshold is met. |
| Montana Adoption Credit | Credit for families who have recently adopted children. Must claim credit for the tax year when adoption was finalized. | $5,000 per eligible child or $7,500 per eligible child in foster care at time of adoption. |
| Montana Elderly Homeowner/Renter Credit | Credit for low-income elderly taxpayers for rent or property taxes paid. | Refundable credit up to $1,150. |
| Montana Earned Income Tax Credit (EITC) | Refundable credit aimed to help low and middle-income workers | 10% of federal EITC; maximum federal credit is $7,830 for 2024 tax year. |
| Qualified Endowment Credit | Nonrefundable credit for charitable donations to qualifying Montana endowments. | 40% of the donation’s value, up to $15,000 for individuals. 20% of the donation’s value, up to $15,000 for corporations, partnerships, and estates. |
| Student Scholarship Organization Tax Credit | Credit for donations to qualifying student scholarship organizations (SSOs). | Up to $200,000. |
How to file Montana state income tax
Filing your Montana state income taxes can feel overwhelming, but you don’t have to do it alone. Whether you’re a resident, part-year resident, or nonresident, TurboTax is here to help. We ensure you get every deduction and credit you’re eligible for so you can keep more of your hard-earned money.
TurboTax Full Service also provides expert guidance, making tax filing smooth and stress-free. Want personalized help? Connect with a local Montana tax expert who can prepare your taxes from start to finish. Whether you do your taxes yourself or work with an expert, we’ll help you maximize your Montana state tax refund.
Start your tax return today with TurboTax and file with confidence.