How Montana taxes a paycheck
Montana simplified its income tax in 2024, going from seven brackets topping out at 6.75% to two: 4.7% and 5.9%. HB 337 of 2025 cuts the top rate to 5.65% for 2026 and 5.4% for 2027 and widens the lower bracket, so for 2026 a single filer pays 4.7% on the first $47,500 of taxable income and 5.65% above; married thresholds are double. Montana starts from federal taxable income, so the $16,100 federal standard deduction applies and there is no state personal exemption.
HB 337 also raised Montana's earned income credit to 20% of the federal credit, claimed on the return. Montana is one of five states with no general sales tax, which is the usual context for its income tax rates. There are no local income taxes.
How much taxes are taken out of paychecks in Montana?
On a $60,000 salary in 2026, a single filer in Montana pays about $5,020 in federal income tax, $4,590 in Social Security and Medicare, and about $2,060 in Montana income tax, leaving roughly $48,330 a year or $1,859 every two weeks. The state share is 3.4% of gross.
At $150,000 the tax is about $7,110, or 4.7%, with income above $47,500 of taxable at 5.65%. The 2027 cut to 5.4% will reduce that figure by about $215.
Montana compared with its neighbours
Montana borders two no-tax states, Wyoming and South Dakota, and two that tax wages: Idaho (flat 5.3%, about $2,070 on a $60,000 single salary) and North Dakota (about $0 on that salary because of its $48,475 zero bracket). Montana's $2,060 matches Idaho almost exactly and sits well above North Dakota.
Wyoming is the comparison along the Yellowstone corridor. A $60,000 earner in Billings pays about $2,060 that a Sheridan resident does not; Wyoming's 4% sales tax against Montana's zero is the other side of that ledger.
Withholding forms and filing status in Montana
Montana employers withhold from Form MW-4, which asks for filing status and allowances; the tables apply the two brackets after the federal standard deduction Montana adopts. Married couples get exactly double the single bracket ($95,000 for the 5.65% rate) and double the deduction, so there is no marriage penalty or bonus at the state level. Montana ended separate filing on a joint return in 2024 as part of the simplification.
Montana's Form 2 is due 15 April and the state grants an automatic extension to 15 October. Montana has a reciprocal agreement with North Dakota only. Idaho and Wyoming residents working in Montana pay Montana tax on those wages; Montana residents working in Wyoming owe Montana tax on them with no credit. HB 337's 2027 cut to 5.4% is set in statute and does not depend on a trigger.