Montana Tax Rates 2026
Income tax, property tax, and estimated take-home pay for Montana residents.
Income Tax in Montana
Montana has a moderate state income tax rate of 5.9%, roughly in line with the national average of 4.3%.
| Tax Component | Rate / Amount | On $75K Salary |
|---|---|---|
| Federal Income Tax | 10-37% (marginal) | $10,238 |
| Montana State Tax | 5.9% | $4,425 |
| FICA (SS + Medicare) | 7.65% | $5,738 |
| Total Tax Burden | $20,401 | |
| Annual Take-Home | $54,599 |
Property Tax in Montana
Montana's effective property tax rate is 0.74%, which is below the national average of 1.07%. On the national median home value of $405,300, Montana homeowners pay approximately $2,999 per year ($250/month) in property taxes.
Property tax is deductible on your federal return if you itemize, but the SALT deduction is capped at $10,000 total (combined state income tax + property tax). In Montana, a $75K earner paying $7,424 in combined state/local taxes stays within the $10,000 SALT cap.
Cost of Living Considerations
Tax rates are only one piece of the puzzle. When comparing Montana to other states, also consider housing costs, healthcare expenses, grocery prices, and transportation costs. Use our calculators below to model your specific situation.
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Sales Tax in Montana
Montana does not levy a state sales tax, making it one of only 5 states without one. This provides meaningful savings on everyday purchases, vehicles, electronics, and other taxable goods. However, some local jurisdictions in Montana may impose their own sales taxes, so check your specific area.
Tax Planning Tips for Montana Residents
Max out pre-tax contributions. Every dollar contributed to a 401(k) or traditional IRA reduces both your federal and Montana state taxable income. A $23,500 401(k) contribution saves you $1386 in state taxes alone.
Itemize strategically. If your combined state income tax and property tax exceed $10,000, you are losing deductions to the SALT cap. Consider strategies like bunching charitable deductions or using a donor-advised fund to maximize itemized deductions in alternating years.
Consider municipal bonds. Interest from Montana municipal bonds is typically exempt from both federal and Montana state income tax. For investors in the 5.9% bracket, this provides a meaningful after-tax yield advantage over comparable taxable bonds.
Who Benefits from Living in Montana?
Middle-income families in Montana face an effective state tax rate of roughly 4.1-5.9%, which is moderate. Families should focus on maximizing deductions and credits available under Montana law.
Remote workers should verify whether Montana taxes income based on residence or employer location. This can significantly impact your net pay if your employer is in a different state.
Small business owners in Montana should explore whether the state offers pass-through entity tax elections, which can help circumvent the $10,000 SALT deduction cap for federal purposes.