Question 1

What is Montana's state income tax rate for 2025?

Accepted Answer

Montana imposes a 2-bracket progressive income tax under Mont. Code Ann. §15-30-2103: 4.70% on single-filer taxable income up to $21,100 and 5.90% above that threshold. Married-filing-jointly thresholds double to $42,200. The current 2-bracket structure was collapsed from a prior 7-bracket schedule by SB 121 and SB 399 (2021) effective TY2024, and bracket thresholds are inflation-indexed annually.

Question 2

What is Montana's standard deduction for 2025?

Accepted Answer

Montana's TY2025 standard deduction under Mont. Code Ann. §15-30-2132 is 20% of Montana AGI, capped at $5,820 for single and MFS filers and $11,640 for MFJ and HOH filers, with a floor of $2,580 single / $5,160 MFJ. Personal exemptions are $2,960 per filer and per dependent, inflation-indexed and non-phased-out.

Question 3

Does Montana tax Social Security and retirement income?

Accepted Answer

Montana partially taxes Social Security benefits based on federal AGI thresholds ($25,000 single / $32,000 MFJ for provisional-income calculation, mirroring federal treatment). The Montana Retirement Income Exemption under Mont. Code Ann. §15-30-2110 provides an income-based subtraction for pension income phased out at higher AGI (fully phased out above $47,000 single / $60,000 MFJ for TY2025).

Question 4

Do Montana cities or counties charge a local income tax?

Accepted Answer

No. Montana does not authorize its municipalities or counties to levy a local income tax. All personal income tax in Montana is collected at the state level under Mont. Code Ann. Title 15, Chapter 30. Montana also does not impose a general state sales tax (though certain 'resort area' municipalities are authorized under Mont. Code Ann. §7-6-1501 to levy a limited local option resort tax on tourism-related goods).

Question 5

What is Montana's capital gains treatment for 2025?

Accepted Answer

Montana provides a 30% capital gains credit under Mont. Code Ann. §15-30-2301 for TY2025, one of only nine states to preferentially treat long-term capital gains. HB 337 (signed April 2025) also further reduces the top marginal rate to 5.65% for TY2026 and 5.40% for TY2027, continuing the multi-year rate reduction begun with SB 399 (2021) — the largest personal-income-tax cut in Montana's history.

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