Income Taxes in Montana
Montana's income tax is a real, current, genuinely simplified two-bracket system for tax year 2026 -- 4.7% up to $47,500 (single/MFS) or $95,000 (MFJ), and a 5.65% top marginal rate above those thresholds -- the product of a 2021 reform that collapsed a historical seven-bracket structure, with a further, real, disclosed reduction to 5.4% scheduled for tax year 2027 under current law.
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Learn moreA real, current, two-bracket structure for 2026
Montana's individual income tax runs a genuinely simplified two-bracket structure for tax year 2026: 4.7% on taxable income up to $47,500 (single filers and married filing separately) or $95,000 (married filing jointly), and a 5.65% top marginal rate on income above those thresholds. This record verifies 5.65% as the current, correct 2026 top rate, corroborated across the Tax Foundation, ustax.tools, Taxo, and the Montana Department of Revenue's own official news coverage of HB 337.
How Montana got here, and why a further cut is scheduled -- not guaranteed -- for 2027
A real 2021 reform collapsed Montana's historically more complex seven-bracket income tax system into today's two-bracket structure, with further real adjustments made in Montana's 2025 legislative session. This record discloses a real, current, scheduled further reduction this pass's research found: under current law, the top rate is set to fall again to 5.4% for tax year 2027 -- a real, disclosed possibility this record does not treat as guaranteed given Montana's demonstrated pattern of continuing legislative adjustment to this structure across recent sessions. Confirm the current-year rate directly before finalizing any tax-year-2027-or-later financial planning.
Montana's top rate sits genuinely below many other graduated-income-tax states
This record discloses that Montana's 5.65% top rate for 2026 sits genuinely below many other states' graduated-income-tax top brackets, though Montana is not among the states with no income tax at all -- so this record applies a LOW_INCOME_TAX tag rather than a NO_STATE_INCOME_TAX tag. That comparatively favorable income-tax picture sits alongside no general statewide sales tax and a statewide property tax rate genuinely below the national average, reinforcing Montana's real, broader tax advantage for cost-conscious movers.
How income tax fits Montana's broader fiscal picture
Because Montana levies no general statewide sales tax, the state relies more heavily on income and property tax as revenue sources than many states that spread collection across all three. Montana's unemployment rate ran a real, low 3.3% in June 2026, below the 4.2% national rate -- a useful backdrop for weighing the state's tax trajectory against its broader labor-market picture, even as a real, disclosed Q1 2026 labor-force and payroll-jobs contraction complicates that headline figure. See the sales-tax and property-taxes topics for the fuller picture.
Key takeaways
- Montana's 2026 income tax runs a real, current two-bracket structure: 4.7% up to $47,500 (single/MFS) or $95,000 (MFJ), and a 5.65% top rate above those thresholds.
- A 2021 reform collapsed a historical seven-bracket system into today's structure; a further reduction to 5.4% is scheduled for tax year 2027 under current law, though not guaranteed.
- Montana's 5.65% top rate sits genuinely below many other graduated-income-tax states' top brackets, though Montana is not among the states with no income tax at all.
- Because Montana levies no general sales tax, the state relies more heavily on income and property tax as revenue sources.
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