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Montana Retirement Income Tax Calculator

Montana taxes federally taxable Social Security, pensions and IRAs at 4.7% and 5.65%.

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Montana resident retirement worksheet

Use the year income is received, not the filing year. Later years use a separately approved assessment until the next return rules are verified.

Prepare the federal-derived taxable base AFTER approved federal standard / adjusted itemized and applicable current federal deductions, BEFORE the displayed Montana additions / subtractions. Exclude the federal qualified-business-income deduction; separately prepare actual state income-tax itemized / business additions and current conformity. Federal taxable Social Security stays in the base. No second pension deduction / old Social Security worksheet / Montana standard deduction is added. State basis, losses, capital netting, owner eligibility, other indexed deductions, credits, part-year / mixed-residency returns and special taxes need their own preparation.

Montana follows the actual federal status. Separate same-return filing is no longer an option. Qualifying survivor uses the wide tax bracket, but adds no living spouse’s age or military receipts.

Approved federal taxable income without the QBI deduction, after current eligible federal deductions. Itemized state income-tax adjustments, SALT limits and standard-deduction floor require actual records. Do not start from gross pension income or deduct the federal standard amount twice.

Actual additions still required, including state income-tax deduction recovery and other applicable conformity / state-basis items. Do not blindly use the estimate publication’s older SALT cap figures; prepare the current federal amount.

Actual allowable current-year amount, excluding railroad, age and military amounts modeled below. Education / medical / volunteer subtractions have their own inflation and eligibility rules; the estimate publication’s printed amounts are not blanket current-year approvals.

Only approved taxable Railroad Retirement Board receipts present in the prepared base, after correct classification. Social Security receipts are not this subtraction. Gross amounts already federally excluded are not removed again.

Current MCA 15-30-2120(7) and 15-30-2101 require $5,500 × June 2025 CPI-U 322.561 ÷ June 2023 CPI-U 305.109, rounded to the nearest $10 = $5,810. This is a reconstruction, not a claimed published final 2026 amount; Department of Revenue publication deadline is November 1 of the tax year. Actual 2026 Publication 1 still prints $5,660. Prepared mode replaces the whole age subtraction and does not add an automatic owner amount.

Approve this actual owner’s source and residency history. Ordinary death benefits are not qualifying Survivor Benefit Plan receipts. Do not classify unrelated private or civil-service pensions as military. Only eligible receipts are entered; unapproved / nonqualifying retirement remains in the starting base.

Resident before receipt and remained resident, or actual qualifying new-resident route under current statute; no subsequent nonresidency that destroys eligibility. A skipped claim does not restart the five consecutive years. Current modeled first eligibility years 2024–2026; other dates or part-year allocations need independent preparation. A joint spouse must qualify independently.

Actual approved first year of the five consecutive eligible years, not the first year you chose to claim it. Continuing WMRE instructions begin qualifying pre-July 2023 resident cases with 2024. Do not replace a residency date or retirement history with this field.

This actual owner’s included qualified military retirement after basis. The combined return’s 50% retirement amount is capped once by approved return-level Montana work income.

Approved military Survivor Benefit Plan receipts, not death benefits. A50% survivor subtraction does not require work income. Do not duplicate working-retiree amounts.

Approve this actual owner’s source and residency history. Ordinary death benefits are not qualifying Survivor Benefit Plan receipts. Do not classify unrelated private or civil-service pensions as military. Only eligible receipts are entered; unapproved / nonqualifying retirement remains in the starting base.

Resident before receipt and remained resident, or actual qualifying new-resident route under current statute; no subsequent nonresidency that destroys eligibility. A skipped claim does not restart the five consecutive years. Current modeled first eligibility years 2024–2026; other dates or part-year allocations need independent preparation. A joint spouse must qualify independently.

Actual approved first year of the five consecutive eligible years, not the first year you chose to claim it. Continuing WMRE instructions begin qualifying pre-July 2023 resident cases with 2024. Do not replace a residency date or retirement history with this field.

This actual owner’s included qualified military retirement after basis. The combined return’s 50% retirement amount is capped once by approved return-level Montana work income.

Approved military Survivor Benefit Plan receipts, not death benefits. A50% survivor subtraction does not require work income. Do not duplicate working-retiree amounts.

Required for working-retiree receipts. Actual eligible wages / salary / tips for services under the resident / source rules. One joint form uses return totals; do not lend or double an owner cap.

Actual eligible materially participating business income, net within this category. WMRE floors this category at zero before combining eligible work sources.

Actual eligible actively engaged business-owner income, net within this category. Passive rents / investments are not automatically work income. This category floors at zero.

Actual eligible farming income, net within this category; floors at zero before the work-source total.

Net included amount after actual state basis, losses and applicable exempt-gain modifications. Do not add sale proceeds or gains absent from the base. Taxable gain is limited to total nonnegative taxable income; qualified dividends and short-term gains remain ordinary.

Prepare actual current eligibility, ordering and limits. Do not insert withholding, estimated payments or refundable elderly homeowner / renter or other credits.

Montana · 2026 estimate

Waiting on a figure

Montana 2026 annual estimate BEFORE credits —
Selected full age 65 subtraction
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Included railroad subtraction
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Your approved working-retiree receipts
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Joint spouse’s approved working-retiree receipts
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Combined approved working-retiree receipts
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Prepared eligible return-level work income
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One combined working-military subtraction
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Approved 50% military survivor subtraction
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Displayed total Montana subtractions
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Nonnegative Montana taxable income
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Taxable ordinary income including qualified dividends
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Taxable net long-term gain
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4.7% /5.65% ordinary estimate
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Remaining 3% gain bracket after ordinary income
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3% /4.1% stacked gain estimate
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Estimate after approved nonrefundable credits
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Calculation scopeConfirm full-year resident scope, federal deductions / basis, current Montana adjustments and distinct included qualifying receipts

Illustrative defaults. Enter approved taxable amounts and confirm eligibility. The result covers the displayed worksheet conditions; a complete return may require other income, adjustments, deductions or credits.

2026 Publication 1 and enacted HB 337 verify 4.7% / 5.65% ordinary and 3% / 4.1% stacked long-term gain estimates at $47,500 / $71,250 / $95,000. The publication still prints $5,660 age relief. Annual indexed $5,810 is a disclosed statutory reconstruction: $5,500 × June 2025 CPI-U 322.561 ÷ June 2023 CPI-U 305.109, rounded to the nearest $10; the final 2026 published age amount is not yet verified. Choose the published estimate, reconstruction or independently prepared subtraction. Current statute and continuing WMRE instructions verify owner eligibility and the combined joint work-income cap. Reviewed October 2, 2026.

Reviewed October 2, 2026. Montana retirement tax after simplification: 2026 rates and deductions

What Montana taxes in retirement

Partly taxed: limits by age, plan, owner or income apply. Military retirement is covered in the guide. How these labels work.

Montana retirement tax after simplification: 2026 rates and deductions

Estimate Montana retirement tax for 2026: Social Security treatment, age deductions, military eligibility, 4.7% / 5.65% rates and long-term gains.

Montana’s retirement calculation changed when the state moved to a federal taxable-income starting point in 2024. Do not use the old pension exclusion, old Montana standard deduction or an independent state Social Security worksheet for this 2026 estimate. Federally taxable Social Security remains in the federal-derived base. Approved Railroad Retirement Board Tier I and Tier II receipts have a separate subtraction. Private pensions, IRA withdrawals and qualified dividends generally remain taxable ordinary income unless a specific current deduction applies. The calculator keeps these distinctions and requires approval of the starting base.

Actual 2026 Publication 1 and the enacted HB 337 explanation verify two ordinary rates: 4.7% below the applicable bracket and 5.65% above it. The lower bracket reaches $47,500 for single or separate filing, $71,250 for head of household and $95,000 for a joint or approved qualifying-surviving-spouse return. These are 2026 limits. The wider 2027 brackets and 5.4% upper rate are not used here. Marginal bands apply to successive taxable-income portions; the upper rate is not applied to all gross retirement income. Nonrefundable credits are entered only after the before-credit estimate.

Prepare federal-derived taxable income after the approved federal standard or adjusted itemized deductions and applicable current federal deductions, excluding the federal qualified-business-income deduction. Add actual required Montana items and subtract other approved state items separately. State income taxes included in federal itemized or business deductions may require an addition, with the federal standard-deduction floor and actual SALT limits considered. The estimate publication contains older descriptive SALT figures, so this tool requires the current prepared adjustment instead of using those figures to determine it. State contribution basis and transition carryovers also need actual records.

The age 65 subtraction needs a dated source choice. Actual 2026 Publication 1 prints $5,660, the amount also found in the 2025 return. Current MCA 15-30-2120(7) requires annual indexing of the $5,500 statutory base, rounded to the nearest $10; MCA 15-30-2101 defines the factor as June of the previous tax year divided by June 2023. Archived BLS releases give June 2025 CPI-U 322.561 and June 2023 CPI-U 305.109. The calculation 5500×322.561÷305.109 gives 5814.5958, rounded to $5,810. That is our disclosed statutory reconstruction for 2026, not a quotation of a verified final 2026 published deduction.

The Department of Revenue must determine the indexed amount by November 1 of the tax year. This page was reviewed October 2, 2026, before that deadline. Choose the printed Publication 1 estimate, the reconstructed annual amount or an independently prepared full subtraction. One eligible owner uses one amount; an actual joint return can use two only when both living spouses reach 65. A qualifying-surviving-spouse tax bracket does not add a deceased spouse’s age deduction. Prepared mode replaces the whole age subtraction and does not stack automatic owner amounts.

Military retirement is not a blanket full exemption. Approve the actual service source, taxable receipts, residence history and five-year window separately for each actual owner. The working-retiree subtraction is the lesser of 50% of eligible taxable military retirement or approved Montana work-source income. The continuing WMRE instructions require a single form when both joint spouses qualify. The model combines approved eligible retirement receipts before applying one return-level work-income cap. It excludes a spouse whose source or eligibility is not approved; unresolved active claim conditions leave the estimate unknown.

For that work cap, prepare eligible wages and actual materially participating sole-proprietor, actively engaged partnership or S-corporation, and farming income. The worksheet floors each eligible business category at zero before adding the work sources. Passive investment receipts are not automatically qualifying wages or business income. Military Survivor Benefit Plan receipts use a separate 50% subtraction without a work-income cap. Ordinary death benefits are not qualifying survivor receipts. Separate military retirement and survivor amounts so the same distribution is not deducted twice.

The military residence rules include the statutory qualifying new-resident route or residence before receiving benefits with continued residence. Subsequent nonresidency can destroy eligibility even if the recipient later returns. Five consecutive eligible years do not restart because a taxpayer skipped a claim. Continuing WMRE instructions begin applicable earlier-resident cases with 2024; the displayed 2026 model requires independently approved first eligible years 2024–2026. Other dates, mixed residency or part-year allocation require their own preparation. Receipt qualification and owner conditions are approved inputs, not inferred from age or a military account label.

Net long-term capital gains have separate 3% and 4.1% rates, stacked above ordinary taxable income. Ordinary income consumes the lower bracket first; only the remaining room can receive the 3% gain rate. Qualified dividends and short-term gains remain in ordinary income. Enter an approved net included gain after actual state basis, capital losses and exempt-gain adjustments, not sale proceeds. Total taxable gain cannot exceed nonnegative Montana taxable income after deductions. When deductions shelter all ordinary income, the remaining taxable gain can use the low gain bracket. This is a cent estimate with approved whole-dollar inputs; final return rounding, special taxes, other indexed deductions, nonrefundable credit limits and refundable elderly homeowner or renter claims remain separate.

Prepare these Montana records

Official Montana source. Actual 2026 Publication 1 rates / calculation, current MCA 15-30-2120 and 15-30-2101, continuing military worksheet and archived BLS June indexes; final 2026 age amount not yet verified.

Calculate the federal portion separately

Use the federal retirement-tax worksheet to prepare federally included benefits and ordinary income. Its federal deduction and rates do not replace the Montana rules above.

Compare Montana with nearby states

Idaho, Wyoming, South Dakota and North Dakota border Montana. Run each one’s worksheet with the same household figures before deciding where a move would leave you.

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Updated / verified · Retirement Income Tax Calculator Editorial Team