Montana is one of five states with no sales tax at all, and one of very few that taxes long-term capital gains at a lower rate than ordinary income.
| Gross pay | — |
| Federal income tax | — |
| Social Security6.2% up to $184,500 | — |
| Medicare1.45%, no cap | — |
| State income tax | — |
| 401(k) contribution | — |
| Health and HSA | — |
Useful if you are comparing a job that pays monthly against one that pays every two weeks, or working out what a raise is worth per paycheck.
| Pay schedule | Gross | Take-home |
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Montana taxes 4.7% up to $47,500 of taxable income for a single filer and 5.65% above. House Bill 337 cut the top rate from 5.9% to 5.65% for 2026, with a further reduction to 5.4% scheduled for 2027, and it significantly widened the band covered by the lower 4.7% rate at the same time.
Widening the lower band matters more than the headline cut for most people. Bracket expansion moves income out of the top rate entirely rather than shaving a quarter point off it, and Montana did both in the same bill.
This is genuinely rare. Most states that tax income tax capital gains as ordinary income at the same rates as wages. Montana taxes long-term capital gains at 3% and 4.1%, with bracket thresholds matching those for ordinary income.
For anyone whose income includes meaningful realised investment gains, that is a substantial difference — roughly a 1.5 to 1.7 point discount against the wage rates. It does not affect a normal paycheck, but it changes the calculus considerably for someone selling a business, a long-held property or a concentrated stock position.
Montana also expanded its earned income tax credit to 20% of the federal credit in 2026, doubled from 10%, which pushes in the opposite direction — benefiting lower-income working households.
Montana joins Alaska, Delaware, New Hampshire and Oregon in levying no general sales tax. Certain resort communities — Whitefish, Big Sky, West Yellowstone among them — may levy a local resort tax on lodging and prepared food, aimed squarely at visitors rather than residents.
The trade against Montana's income tax rates is real but favourable for most households. Compared with Idaho next door, which taxes 5.3% and applies full sales tax including on groceries, Montana's higher nominal income tax rate is frequently the better deal.
Montana conforms to the federal standard deduction — $16,100 single, $32,200 joint — which removes a substantial amount before any rate applies. No Montana municipality levies an income tax.
No general sales tax. Some resort communities levy a local tax on lodging and prepared food, aimed primarily at visitors.
At preferential rates of 3% and 4.1%, below the 4.7% and 5.65% applied to ordinary income. Very few states give capital gains a lower rate.
Yes. The top rate fell from 5.9% to 5.65% in 2026 and is scheduled to reach 5.4% in 2027. The 2026 legislation also widened the lower bracket substantially.
Yes — $16,100 single and $32,200 joint for 2026.