Montana income tax goes up to 5.65% at the top bracket. Calculate your combined federal + state effective tax rate for 2026. Formula shown, sources cited — no account required.
Montana uses a graduated income tax system with rates that step up to a top marginal rate of 5.65%. The brackets progress through several tiers, with the 5.65% rate applying above approximately $17,400 for single filers. For the median household at $75,340, most income lands in the top bracket, though the effective rate is lower once the standard deduction and personal exemptions are applied. Montana's most unusual tax feature is the complete absence of a sales tax — no general sales tax applies to purchases of goods or services, which distinguishes the state from nearly all others. That zero sales tax rate reduces the effective consumption tax burden compared to states charging 6% to 9% on most purchases. On the federal side, Montana's median earner typically falls in the 22% federal bracket, making the combined marginal burden approximately 27.65%. Montana does have capital gains taxes at the state level, though with some provisions that favor long-term gains. Use the tax bracket calculator to see how Montana's bracket structure applies to your specific income.
Montana Tax Brackets Explained (2026)
Montana has a state income tax with a top marginal rate of 5.65%. On top of federal rates (10%–37%), residents can face a combined marginal rate exceeding 35% at higher income levels. However, your effective rate is always lower than the marginal rate because only income above each threshold is taxed at that bracket's rate.
The median household in Montana earns $75,340/year. At that income (single filer), the federal effective rate is approximately 12–14%, bringing total income tax (federal + state) to roughly 15–18%.
How Marginal vs. Effective Rate Works
The marginal rate is the rate on your last dollar of income — it does not apply to all income. The effective rate is your total tax divided by total income. For example, someone earning $100,000 in Montana has a 22% federal marginal rate but an effective federal rate of roughly 15%, because the first $44,725 (2024) is taxed at 10% and 12%, not 22%.