How Montana withholds on a bonus
Montana's 2026 Publication 1 lets employers withhold a flat 5% on supplemental wages paid separately from regular pay, or add them to the current or preceding period's regular wages and withhold on the total. The 5% sits between Montana's 4.7% and 5.65% rates. On a $10,000 bonus the percentage method withholds $2,200 federal, $620 Social Security, $145 Medicare and $500 Montana, leaving $6,535. Montana has no local income taxes and no sales tax.
Under the aggregate method Montana applies its two brackets to the combined paycheck: a $60,000 earner's bonus is withheld at 5.65% on most of it, about $560 rather than $500; the federal line rises to about $2,700. Montana's top rate falls to 5.4% in 2027, which will bring the two figures closer.
What the withholding means for your Montana return
For a $60,000 single filer, whose Montana marginal rate is 5.65% above $47,500 of taxable income, the 5% supplemental withholding leaves a small balance of about $65 per $10,000 on the return; for lower earners in the 4.7% bracket it slightly over-withholds. The federal side returns roughly $750 on $10,000. North Dakota residents who earn a bonus in Montana are withheld for North Dakota under reciprocity; Idaho and Wyoming residents are withheld for Montana. The Montana paycheck calculator shows the marginal rates for any salary. Allowances on Montana Form MW-4 do not reduce the flat 5% withheld from a separately paid bonus; they apply only when the bonus is combined with the period's regular wages under the aggregate method.