Montana sits at an unusual intersection. It is one of only five states with no general sales tax — which makes its overall tax burden lighter than its income tax rate suggests. And it is one of only eight states that still tax Social Security — which makes its retirement position heavier than its reputation suggests.
The income tax itself is straightforward: 4.7% and 5.65%, above a standard deduction that matches the federal one at $16,100.
On $85,000 a single filer pays $3,442 and takes home $65,186.
A note before you start. This is general education, not tax advice. Federal figures are tax year 2026, from IRS Revenue Procedure 2025-32 and the Social Security Administration; Montana's rates, deduction, capital gains treatment and retirement rules come from this site's own sourced 50-state dataset, citing MCA Title 15 chapter 30 and the Department of Revenue's Form 2 and Publication 1. Every dollar figure is computed by the same engine the site's calculators use, on a single filer taking the standard deduction with no dependents or pre-tax deferrals unless stated. Property tax is discussed qualitatively.
1. What Montana takes
| Amount on $85,000 | |
|---|---|
| Gross salary | $85,000 |
| Federal income tax | −$9,870 |
| Social Security (6.2%) | −$5,270 |
| Medicare (1.45%) | −$1,233 |
| Montana income tax | −$3,442 |
| Take-home | $65,186 |
Across incomes, single filer:
| Salary | Montana tax | Effective MT rate | Take-home |
|---|---|---|---|
| $30,000 | $653 | 2.18% | $24,632 |
| $45,000 | $1,358 | 3.02% | $36,980 |
| $60,000 | $2,063 | 3.44% | $48,327 |
| $85,000 | $3,442 | 4.05% | $65,186 |
| $120,000 | $5,419 | 4.52% | $87,831 |
| $175,000 | $8,527 | 4.87% | $122,352 |
But the figure that matters most is not in that table, because Montana raises no sales tax at all. A household spending $50,000 a year in Montana pays nothing on it that a household in Tennessee or Louisiana would pay several thousand dollars on. That offset is real and it is invisible in every income tax comparison.
Run your own salary against Montana's brackets2. The brackets
| Taxable income above | Rate (single) |
|---|---|
| $0 | 4.7% |
| $47,500 | 5.65% |
Married-joint thresholds are exactly double: 5.65% begins at $95,000 of taxable income. Head of household sits between, at $71,250.
For a single filer on $85,000: $16,100 sheltered, $68,900 taxable, $47,500 of it at 4.7% and $21,400 at 5.65% — $2,232 plus $1,209, or $3,442.
Two brackets, and the split point is high enough to matter. Unlike Kansas, where the two rates are 0.38 points apart, Montana's differ by nearly a full point, and the threshold sits where a lot of professional salaries land. An $85,000 earner's next raise is taxed at 5.65%; a $55,000 earner's at 4.7%.
The standard deduction matching the federal $16,100 is what keeps the bill moderate, and it is Montana's most consequential structural choice. A 5.65% rate behind Arkansas's $2,470 deduction would produce a substantially larger bill.
3. Filing jointly
| Salary | Single MT tax | Joint MT tax | Difference |
|---|---|---|---|
| $30,000 | $653 | $0 | $653 |
| $45,000 | $1,358 | $602 | $756 |
| $60,000 | $2,063 | $1,307 | $756 |
| $85,000 | $3,442 | $2,482 | $960 |
| $120,000 | $5,419 | $4,127 | $1,292 |
| $175,000 | $8,527 | $7,166 | $1,361 |
The joint benefit grows with income, which is what a genuinely graduated schedule with doubled thresholds produces. At $45,000 it is $756 — the doubled deduction alone. By $175,000 it is $1,361, because the couple keeps more income inside the wider 4.7% band.
At $30,000 a couple owes Montana nothing, since $30,000 falls below the $32,200 joint standard deduction.
4. What the paycheck actually looks like
On $85,000 as a single filer:
| Pay schedule | Gross per cheque | Net per cheque |
|---|---|---|
| Weekly (52) | $1,634.62 | $1,253.58 |
| Biweekly (26) | $3,269.23 | $2,507.15 |
| Semi-monthly (24) | $3,541.67 | $2,716.08 |
| Monthly (12) | $7,083.33 | $5,432.16 |
Biweekly and semi-monthly are not the same thing. Biweekly is 26 cheques — every other Friday — so two months a year carry three paydays. Semi-monthly is 24, on fixed dates, so every month carries exactly two. The annual total is identical; the monthly cash flow is not, and a biweekly earner budgeting on "two cheques a month" is under-counting by $5,014 a year.
Montana uses Form MW-4, and because the state standard deduction matches the federal one, a correctly completed federal W-4 translates across more cleanly here than in most states.
Withholding is an estimate, not the tax. Over-withholding produces a refund; under-withholding a bill.
5. No sales tax, and what that is actually worth
Montana is one of five states with no general sales tax — with Alaska, Delaware, New Hampshire and Oregon.
Work out what that is worth to you. A household spending $45,000 a year on taxable goods and services would pay:
| In a state charging | Annual sales tax on $45,000 of spending |
|---|---|
| 4% | $1,800 |
| 7% | $3,150 |
| 9% | $4,050 |
Against a $3,442 income tax bill at $85,000, that is not a rounding error — it is the same order of magnitude. A Montana household paying $3,442 of income tax and no sales tax may well be better off overall than one in a no-income-tax state paying $4,050 at the register.
This is the comparison that actually matters for Montana, and it is the one that income tax rankings systematically get wrong. Montana looks mid-table on income tax and considerably better than mid-table on total state and local burden.
Resort communities are the exception. A small number of Montana towns — Whitefish, Big Sky, West Yellowstone and others — are authorised to levy a local option resort tax on lodging, prepared food, and certain retail. It applies in those specific communities only, is aimed largely at visitors, and does not make Montana a sales tax state.
Property tax is where Montana raises the difference. Effective rates on owner-occupied housing sit around the national middle, and property tax has been the dominant Montana fiscal debate of recent years as valuations in the western part of the state have risen sharply. For a homeowner in Missoula, Bozeman or the Flathead, that bill has moved more than any income tax change.
6. Montana taxes Social Security — and applies no threshold of its own
Montana is one of only eight states that still tax Social Security benefits, and its mechanism differs from every other one of them.
The other seven set a state income threshold. Colorado exempts below $75,000 of federal AGI, Connecticut below $75,000, New Mexico below $100,000, Minnesota below $86,410.
Montana sets none. Because Montana begins from federal taxable income, whatever survives the federal computation under IRC section 86 — provisional income measured against the federal base amounts of $25,000 and $32,000, capped at 85% of benefits — is simply what Montana taxes. There is no Montana subtraction and no Montana threshold.
Two consequences:
A Montana retiree with low enough provisional income pays nothing, because the federal computation already exempted the benefits. The federal thresholds do the work.
But those federal base amounts have never been indexed for inflation. $25,000 and $32,000 were set in 1983 and have not moved since. Every year, more retirees cross them in nominal terms. Montana's Social Security tax therefore expands automatically, without any Montana legislation, purely because a federal threshold from 1983 stands still.
That is a genuinely unusual mechanism and it is worth understanding: Montana's treatment of Social Security is set in Washington, not Helena.
7. The rest of retirement, and the exemption that was repealed
Private and public pensions are treated identically in Montana — both fully taxable.
Montana has no state, federal, PERS or TRS pension exclusion. That was confirmed by absence from MCA 15-30-2120's subtraction list, from Publication 1's subtraction list, and from Form 2 Schedule I.
401(k), 403(b) and traditional IRA distributions are fully taxable as well.
The 2024 repeal
Montana used to have a partial pension, annuity and IRA exemption of roughly $4,640. It was repealed effective January 1, 2024, along with the partial interest-income deduction for filers 65 and over and the partial retirement disability deduction.
Any guide describing that exemption is out of date, and the error understates a Montana retiree's tax.
What replaced it is a flat age-based subtraction for filers 65 and over — a different mechanism aimed at the same people, and not tied to the source of the income.
Military retirement has a conditional exclusion that this calculator does not model, because eligibility depends on circumstances beyond the figures a take-home calculator has. If you are a military retiree considering Montana, that is worth checking directly rather than inferring from these numbers.
| Retirement income, single | Montana tax |
|---|---|
| $40,000 all Social Security, low provisional income | $0 |
| $40,000 all 401(k) withdrawals | About $1,123 |
| $70,000 — $30,000 SS + $40,000 401(k) | $1,123 or more, depending on the federal computation |
Montana is not a strong retirement tax state, and it is worth saying plainly because the absence of a sales tax and the state's general reputation both point the other way. Idaho, Wyoming and North Dakota all treat a retiree with a 401(k) and Social Security better than Montana does.
8. The capital gains rate that most states do not have
Montana is one of the few states with a genuine preferential long-term capital gains rate, and it is two-tier: 3.0% and 4.1% under MCA 15-30-2103(2), with thresholds identical to the ordinary brackets.
So a Montanan's long-term gains are taxed 1.55 to 1.7 percentage points below their ordinary rate, at every level.
| Realised long-term gain, higher earner | At the ordinary 5.65% | At the preferential 4.1% |
|---|---|---|
| $100,000 | $5,650 | $4,100 |
| $500,000 | $28,250 | $20,500 |
| $1,000,000 | $56,500 | $41,000 |
On a $1,000,000 gain the preference is worth $15,500. For someone selling a ranch, a business or a long-held property — which in Montana is a common enough event — that is the largest single feature of the state's tax code affecting them.
Short-term gains get the ordinary rates. The holding period does real work here in a way it does not in the majority of states.
9. No local income tax
Montana has no local income tax of any kind, and local governments are affirmatively barred from imposing one.
MCA 7-1-112(1) lists, among the powers a self-government local unit may NOT exercise absent express state delegation, "the power to authorize a tax on income or the sale of goods or services."
That single clause does two things at once. It bars a local income tax and it bars a local sales tax — which is why the resort tax in section 5 required its own express delegation rather than being available to any town that wanted one.
A Montana take-home figure needs no local asterisk, and it is barred rather than merely absent.
10. Where Montana ranks
At $85,000, Montana's $3,442 is twenty-second of the 41 income-tax states — almost exactly the median.
| State | Tax on $85,000 |
|---|---|
| Michigan | $3,362 |
| Montana | $3,442 |
| Georgia | $3,493 |
| Idaho | $3,519 |
Against its four neighbours:
| Salary | MT | ID | ND | WY / SD |
|---|---|---|---|---|
| $30,000 | $653 | $604 | $0 | $0 |
| $45,000 | $1,358 | $1,399 | $0 | $0 |
| $85,000 | $3,442 | $3,519 | $377 | $0 |
| $175,000 | $8,527 | $8,289 | $2,132 | $0 |
Montana and Idaho are within $80 of each other at $85,000, which is remarkable convergence for two states that arrive there by different routes — and it means the income tax should not decide between them. Sales tax should: Idaho has one, Montana does not.
North Dakota takes $377 at $85,000 and also has a sales tax. Which is cheaper overall depends on what you spend.
Wyoming and South Dakota take nothing, and Wyoming also exempts groceries from a low sales tax — a combination Montana cannot beat on tax alone.
11. What you can control
Pre-tax deferrals save 5.65% at state level for anyone above $63,600 of salary. A $10,000 traditional 401(k) contribution saves an $85,000 earner $2,200 federally plus $565 in Montana tax.
But read section 7. That money is fully taxable in Montana when it comes out, at every age, because Montana repealed its retirement exemption. The deferral defers rather than avoids the state tax — and if you will still be in the 5.65% bracket in retirement, it does not even do that.
Holding for long-term treatment is worth more in Montana than in most states, because of the preferential rate in section 8. The gap between 5.65% and 4.1% is 1.55 points of pure timing.
HSA contributions through payroll cut federal tax, Montana tax and FICA. On $4,400 that is roughly $968 federal, $249 Montana and $337 FICA — about $1,554, or 35% of the amount contributed.
And the biggest lever is not a tax lever at all. In a state with no sales tax, the money you keep is the money you keep — there is no second bite at the register. That makes Montana's take-home figure closer to a real spending figure than almost any other state's.
12. Property tax is Montana's real fiscal argument
An article about Montana's income tax that ignores property tax describes the smaller half of the state's tax debate.
Montana's effective property tax rates on owner-occupied housing sit around the national middle, which sounds unremarkable. What is not unremarkable is what has happened to the assessed values those rates apply to.
Property values in western Montana have risen sharply, and because property tax is levied on value, the bills followed. Gallatin, Missoula, Flathead and Ravalli counties have seen the largest moves, and the resulting bills have been the dominant Montana fiscal story of recent years — larger, in dollars, than any income tax change the legislature has made.
Three consequences worth understanding before a move:
A long-term owner can face a bill scaled to a market they did not participate in. Someone who bought in Bozeman in 2005 pays tax on 2026 values, on an income that did not rise the same way. This is the characteristic Montana problem and it falls hardest on retirees.
It varies enormously by county and by district. A statewide average tells you almost nothing about the bill on a specific house. Run the actual mill levy for the actual property.
Montana has relief programmes — a property tax assistance programme keyed to income, and an elderly homeowner and renter credit — but they are income-tested and modest relative to the bills in the high-value counties.
Set this against the no-sales-tax advantage in section 5. Montana raises no sales tax and a moderate income tax, so property tax carries more of the load than it would in a state with three revenue streams instead of two. For a renter, Montana's structure is genuinely light. For an owner in a high-value county, it is not, and that split is the honest summary of living there.
Frequently asked questions
What is Montana's income tax rate? Two brackets: 4.7% up to $47,500 of taxable income and 5.65% above it, behind a standard deduction that matches the federal $16,100.
What is take-home pay on $85,000 in Montana? $65,186 for a single filer taking the standard deduction, after $9,870 federal income tax, $6,503 FICA and $3,442 Montana income tax.
Does Montana have a sales tax? No general sales tax — one of only five states without one. A small number of resort communities levy a local option resort tax on lodging, prepared food and certain retail, but that is not a statewide sales tax.
Does Montana tax Social Security? Yes. Montana is one of only eight states that still do, and unlike the other seven it applies no state threshold of its own — it simply taxes whatever the federal computation makes taxable.
Does Montana tax my pension or 401(k)? Yes, in full. Private and public pensions are treated identically and both are taxable, and there is no general 401(k) or IRA exclusion. The old partial exemption of roughly $4,640 was repealed effective January 2024.
Does Montana tax capital gains? At a preferential rate: 3.0% and 4.1% against ordinary rates of 4.7% and 5.65%. That is a genuine preference most states do not offer, and it applies to long-term gains only.
Can a Montana city or county tax my income? No. MCA 7-1-112(1) bars local governments from authorising a tax on income or on the sale of goods or services without express state delegation.
Is Montana a good retirement state? On tax, no — it taxes Social Security, pensions and 401(k) withdrawals alike, and repealed its partial exemption in 2024. The absence of a sales tax is the offset, and for a retiree with modest spending it may not cover the difference.
What to do next
Montana's income tax is mid-table and its absence of a sales tax is not. If you are working, the total burden is lighter than the ranking suggests; if you are retiring, it is heavier.
- Montana take-home pay calculator — your salary with every deduction shown separately.
- Your Paycheck in the USA in 2026 — all fifty states on one salary.
- Take-Home Pay in Idaho — within $80 at $85,000, and with a sales tax.
- Take-Home Pay in Wyoming — no income tax, low sales tax, groceries exempt.
- 50/30/20 budget calculator — built on take-home rather than salary.
Every figure on this site is sourced and dated. How we source every number.
Figures in this article are illustrations computed by this site's own tax engine for tax year 2026, on a single filer taking the standard deduction with no dependents or pre-tax deferrals unless stated. Federal figures come from IRS Revenue Procedure 2025-32 and the Social Security Administration; Montana's brackets, deduction, capital gains rates, retirement treatment and the MCA 7-1-112 local-tax bar from this site's sourced 50-state dataset, citing MCA Title 15 chapter 30 and the Montana Department of Revenue. The military retirement exclusion is conditional and is not modelled. Resort taxes and property tax are discussed qualitatively rather than computed. This is general education and not tax advice; consult a licensed tax professional for your own situation.