Montana simplified from seven brackets to two in 2024 — 4.7% on income up to $20,500 and 5.9% above. No sales tax anywhere in Montana.
Montana's standard deduction is approximately $5,390 (single) / $10,780 (married) — lower than the federal $16,100. Montana has no statewide sales tax, making it a shopping destination for Idahoans and North Dakotans. Billings, Missoula, Great Falls, and Bozeman are Montana's largest cities. Montana attracts remote workers and retirees seeking outdoor lifestyle at lower costs than neighboring Idaho or Colorado. No Montana city levies a local income tax.
Montana's House Bill 192 (2021) enacted the most significant income tax reform in Montana history, effective January 1, 2024. The old seven-bracket system — with rates from 1% to 6.9% — was replaced by a clean two-bracket structure: 4.7% and 5.9%. For most Montana earners, the shift means a lower effective rate than they paid under the old system, particularly in the middle brackets where rates previously peaked before falling back. A worker earning $65,000 under the old system was in a 6.9% bracket at the top of their income; under the new system, most of their income falls in the 5.9% bracket after the $20,500 threshold is passed.
Bozeman has become one of the most scrutinized housing markets in the mountain West. Remote work migration — particularly from Silicon Valley, Seattle, and Denver — turned Bozeman into a case study in small-city gentrification. From 2019 to 2023, Bozeman home prices more than doubled, pricing out many longtime Montana residents. The influx of high-earning remote workers simultaneously increased Montana's tax base and its cost of living. A software engineer earning $180,000 remotely for a California company, now living in Bozeman, pays Montana income tax at the 5.9% top rate — roughly $10,000 per year less than they would have paid in California's 9.3% bracket.
Montana has no statewide sales tax — one of only five states with no sales tax. This makes purchases in Montana entirely free of sales tax, a significant draw for large purchases like vehicles, building materials, and electronics. Residents of neighboring Idaho (no sales tax in Montana, 6% sales tax at home) and North Dakota (5% sales tax) sometimes make large purchases in Montana specifically to avoid their home state's tax. Montana does allow some local option taxes in resort communities (Big Sky, Whitefish), but these are narrow.
Montana's economy is anchored by agriculture (wheat, cattle, timber), tourism (Glacier National Park, Yellowstone gateway communities), energy (coal, oil, and wind), and increasingly remote work and healthcare. The University of Montana (Missoula) and Montana State University (Bozeman) are significant employers. Billings, Montana's largest city, is a regional commercial hub with a substantial healthcare and energy sector. Helena, the state capital, has a government-dominated economy.
Estimates only. MT std deduction ~$5,390 (single) / ~$10,780 (married). Brackets: 4.7% on first $20,500, 5.9% above (single). Consult a tax professional for advice.
| Gross Pay (this check) | $0.00 |
| Federal Income Tax | −$0.00 |
| Montana State Tax (4.7%/5.9%) | −$0.00 |
| Social Security (6.2%) | −$0.00 |
| Medicare (1.45%) | −$0.00 |
| Net Take-Home Pay | $0.00 |
Montana has two income tax brackets effective 2024 (HB 192): 4.7% on taxable income up to $20,500 (single) / $41,000 (married), and 5.9% on income above those thresholds. Montana's standard deduction is approximately $5,390 (single) / $10,780 (married). For most workers, the effective Montana state tax rate is 5.3–5.7% on gross pay.
No. Montana has no statewide sales tax, making it one of only five US states with no sales tax. This makes Montana a popular destination for large purchases — vehicles, lumber, appliances, electronics — by residents of neighboring states. Some resort communities (Big Sky, Red Lodge, Whitefish) have local option taxes on resort-related transactions, but these are narrow and do not apply to most purchases.
Idaho has a flat 5.8% income tax, while Montana has 4.7%/5.9% brackets with a $20,500 threshold. At $100,000, the two states produce very similar state income tax bills — Montana is slightly higher because most income falls in the 5.9% bracket (vs. Idaho's flat 5.8%), but the difference is minimal. Montana has no sales tax; Idaho has a 6% sales tax. For lifestyle and total tax comparison, Montana's income tax is roughly equivalent to Idaho's, while Montana saves residents on sales tax purchases.
Montana taxes Social Security to the extent it is included in federal adjusted gross income. For lower-income retirees, a portion of Social Security may be taxable at the federal level, which then flows through to Montana. Montana does not offer an additional state exemption beyond the federal rules. Retirees with combined income (half of SS plus other income) above $25,000 (single) / $32,000 (married) may owe some Montana tax on their Social Security — though the amount is typically modest.
On $70,000 (single, biweekly), Montana withholds approximately $160–$180 per paycheck — roughly $4,200–$4,700 annually. After the ~$5,390 standard deduction, taxable income is about $64,610. The first $20,500 is taxed at 4.7% ($964), and the remaining $44,110 at 5.9% ($2,602) — totaling roughly $3,570 in Montana state tax. The effective rate on gross pay is approximately 5.1%.
Bozeman's housing costs have risen dramatically — median home prices regularly exceed $600,000–$700,000, making it one of the least affordable small cities in the mountain West relative to local wages. For remote workers earning California or New York salaries, the income tax savings vs. those states are significant. For local workers in education, healthcare, or retail earning Montana median wages ($55,000–$70,000), housing affordability is the dominant financial concern, and the income tax rate (effective ~5%) is a smaller factor than housing costs.
Montana taxes overtime and tips at regular state income tax rates (4.7%/5.9%). The federal exemptions under the One Big Beautiful Bill apply only to federal income tax — Montana has not enacted state-level equivalents. See our Overtime Tax Calculator for federal overtime savings.