Montana tax return changes for 2026

The Department of Revenue says HB 337 widens the lower bracket and lowers the upper rate. The top rate drops from 5.9% to 5.65% on January 1, 2026.

• 2026: 4.7% up to $95,000 joint, $71,250 head of household, $47,500 single or separate; 5.65% above.
• 2027: 4.7% up to $130,000 joint, $97,500 head of household, $65,000 single or separate; 5.4% above.
• Long-term capital gains stay at 3.0% and 4.1%, with brackets adjusted to match.
• The Montana EITC rises to 20% of the federal credit from 2026.

Montana’s withholding method now mirrors the federal one: allowances and Montana deductions are gone, and the calculation uses the federal standard deduction for the employee’s filing status. The Department recommends a new MW-4 each year.

Make sure each Montana payroll client has updated tables and fresh MW-4s on file. Montana has no general sales tax; see /us/sales-tax/montana for details.