Retirement taxes by state
How Montana taxes retirement income in 2026
Montana's income tax rates run from 4.7% to 5.65%. Here's how Montana treats Social Security, retirement-account withdrawals, pensions and Roth conversions in 2026 — and what that means in dollars: a retired couple, both 67, with $98,000 of income pays about $896 in Montana income tax.
Updated October 2026 · 2026 tax year
Montana at a glance
- Income tax from 4.7% to 5.65%.
- Social Security is taxed as on your federal return.
- Extra $5,660 deduction per person from age 65.
- Capital gains get lower rates (3% / 4.1%).
- Changes already passed into law for 2027 are included.
Montana retirement tax questions
Does Montana tax Social Security?
Social Security is taxed as on your federal return.
Does Montana tax 401(k) and IRA withdrawals?
Yes, at the state's regular income tax rates. Montana has no special exclusion for retirement-account withdrawals. Also: extra $5,660 deduction per person from age 65.
Does Montana tax pensions?
Yes, at the state's regular income tax rates. Montana has no special pension exclusion.
Does Montana tax Roth conversions?
Yes. A Roth conversion counts as income in Montana in the year you convert, taxed at the state's regular rates. Qualified Roth withdrawals later aren't taxed.
What is Montana's income tax rate in 2026?
Montana's income tax rates run from 4.7% to 5.65%.
What retirees actually pay in Montana: three examples
Calculated with Retirology's tax engine under 2026 law, using each state's standard deduction, its retirement breaks and the 2026 federal rules for how much Social Security is taxable. For the retired couple, Montana ranks 43rd lowest of the 50 states and DC.
| Household | Total income | Montana tax | Share |
|---|---|---|---|
| Retired couple, both 67 $48,000 of Social Security, $40,000 drawn from IRAs and 401(k)s, and $10,000 of qualified dividends | $98,000 | $896 | 0.9% |
| Single retiree, 70 $30,000 of Social Security, a $25,000 pension and $15,000 of IRA withdrawals | $70,000 | $1,529 | 2.2% |
| Early-retired couple, both 56, converting to Roth A $60,000 Roth conversion and $20,000 of long-term gains and qualified dividends, living on savings | $80,000 | $1,907 | 2.4% |
State income tax only — before local taxes, property tax relief and credits not listed above. Federal income tax is extra and the same in every state.
Montana income tax brackets (2026)
Rates apply to Montana taxable income, after the state's deductions and the retirement breaks above. Brackets are adjusted for inflation each year.
| Single | Rate | Married filing jointly | Rate |
|---|---|---|---|
| Up to $47,500 | 4.7% | Up to $95,000 | 4.7% |
| Over $47,500 | 5.65% | Over $95,000 | 5.65% |
Details and limits
Starts from federal taxable income; Social Security taxed as federally, with a $5,660 subtraction per person 65+. Capital gains at 3% / 4.1%. Top rate 5.4% from 2027.
Sources
Rates and rules for the 2026 tax year, from Retirology's state tax data (reviewed October 2026):
This page explains state tax rules in general terms. It isn't tax advice — check your state's official instructions or a tax professional for your situation.