(MONTANA) Montana will use a two-bracket, progressive state income tax structure for tax year 2026, with 4.7% applying to taxable income up to expanded thresholds and 5.65% applying above those thresholds. The changes were enacted through House Bill 337 and apply to tax years beginning January 1, 2026, and ending December 31, 2026.
For immigrants and other newcomers who settle in Montana for work, study, or family reasons, this matters because state income tax affects paycheck withholding, cash flow, and what families keep after rent, childcare, and health costs. It also affects cross-border workers, new permanent residents, and foreign nationals who arrive midyear and must sort out Montana residency rules and filing status with care.
The 2026 rate change Montana workers will feel first
The main shift for 2026 is how far the lower bracket reaches. Montana’s 4.7% rate now covers taxable income up to higher thresholds that were “nearly doubled from prior years” under House Bill 337. Above those thresholds, Montana applies a top marginal rate of 5.65%, down from 5.9%, with a further drop to 5.4% in 2027 written into the same policy track.
That bracket expansion is a day-to-day issue for immigrant households because many are in their highest-earning years while also paying for immigration filing fees, credential licensing, and remittances. A wider lower bracket can reduce the slice of income taxed at the higher rate, even when total earnings do not change.
2026 bracket thresholds: what is known now
Montana’s 2026 brackets remain simple: two rates and a threshold that changes by filing status. The most concrete threshold published for 2026 is for single filers.
- Single: 4.7% on taxable income up to $95,000, then 5.65% above $95,000.
- Married filing separately: aligned with single, with 4.7% up to $95,000, then 5.65% above that amount.
- Married filing jointly: the 4.7% threshold expands to nearly double prior levels; the prior figure referenced is $41,000, but the final 2026 table figure is expected in Department of Revenue tables.
- Head of household: expanded similarly; the prior threshold referenced is $30,750, with the updated amount expected in Department of Revenue tables.
Montana adjusts thresholds annually for inflation. For 2026, the expansion itself stems from House Bill 337, which broadened the reach of the lower bracket.
Quick reference table (known figures)
| Filing status | 4.7% threshold (known/expected) | 5.65% above |
|---|---|---|
| Single | $95,000 | Above $95,000 |
| Married filing separately | $95,000 | Above $95,000 |
| Married filing jointly | Expanded (prior $41,000) | Above expanded threshold |
| Head of household | Expanded (prior $30,750) | Above expanded threshold |
Important: The Department of Revenue will publish the final 2026 table values for married filing jointly and head of household.
Why immigrants should care about “taxable income” and not just wages
Many people read “4.7%” and assume it applies to gross salary. Montana taxes taxable income, which:
- Starts with federal adjusted gross income (AGI).
- Then applies Montana additions and subtractions.
This matters for immigrants because federal AGI can differ depending on whether you are paid as an employee, a scholarship recipient, or a self-employed contractor. It also changes when you have foreign income reportable on a federal return, even if some of that income receives federal relief under other rules.
Montana also uses a standard deduction tied to AGI. The standard deduction is described as about 20% of AGI, with minimum and maximum amounts as follows:
- Minimum: $4,520 (joint) and $2,260 (single)
- Maximum: $10,180 (joint) and $5,090 (single)
For immigrant families, deductions shape whether a raise pushes more income above the threshold taxed at 5.65%. They also shape estimated-tax planning for people with multiple jobs or mixed income types.
Capital gains: different rates, same bracket structure
For 2026, Montana taxes capital gains using the same bracket structure but at reduced rates:
- 3% up to the base thresholds (for example, $95,000 for single filers)
- 4.1% above the thresholds
This matters to immigrants who sell stock from an employee equity plan, liquidate investments to pay immigration legal fees, or sell a prior home after moving. If you are new to the United States 🇺🇸, it also matters because you might not expect a state-level capital gains system that differs from wage taxation while still using the same bracket break.
Where to confirm final tables and updates
Montana’s Department of Revenue is the place to confirm final 2026 tables once published. The Department’s site was noted as having the latest tables covering 2025 at the time these 2026 details circulated, with 2026 tables expected post-release. The most direct official reference point is the Montana Department of Revenue.
This is also where immigrants should check guidance on Montana subtractions and other adjustments that can affect taxable income. Even when bracket rates are clear, small state-level adjustments can change the final amount due or the size of a refund.
Filing season timing and what midyear arrivals should plan for
The filing deadline referenced for final filings is April 15, 2026. Immigrants who arrive in Montana during 2026 often face a first-year filing that is more complicated than expected, especially when they have a part-year work history in another state or another country.
Practical issues that come up repeatedly include:
- Starting a job before you have a long U.S. tax record, which can lead to withholding that does not match your real tax bill.
- Switching from a nonresident federal tax posture to a resident posture, which can shift what income appears in federal AGI and then flows into Montana’s starting point.
- Getting married during the year, then choosing whether to file jointly or separately, which can change which 4.7% threshold applies.
Households also need to remember that Montana has no sales tax, which affects overall cost-of-living math compared with states that tax most purchases. That does not remove the need to plan for income tax withholding, especially for single-income families supporting relatives abroad.
Payroll, onboarding, and immigration paperwork that intersects with state taxes
Montana’s income tax rates do not change federal immigration work authorization rules, but real life blends these systems. Many newly arrived workers go through onboarding, payroll, and compliance steps all at once, and mistakes in one area spill into another.
Two federal forms come up often in hiring and recordkeeping:
- Form I-9, used by employers to verify identity and work authorization. Official information is on USCIS here: Form I-9, Employment Eligibility Verification.
- Form AR-11, used to report a change of address to USCIS for many noncitizens. Official information is here: Form AR-11, Change of Address.
These are not tax forms, but they shape stability. If a worker’s paperwork gets delayed because documents are missing or an address was not updated, that can interrupt pay, which then complicates withholding and estimated payments. When income is uneven across the year, the 4.7% / 5.65% bracket split can become harder to predict from a simple paycheck calculator.
Married filing jointly vs separately: an immigration reality, not just a tax choice
For mixed-status families, filing status is sometimes more than a math exercise. Some couples keep finances separate due to prior obligations, family support overseas, or differing timelines for immigration benefits. Others file jointly to align household documentation and reduce friction when applying for housing, loans, or other needs.
For 2026, the known threshold detail is clearest for single and married filing separately, both tied to $95,000 for the 4.7% bracket. For married filing jointly, Montana’s 4.7% bracket is described as expanded to nearly double prior levels (prior reference $41,000), and updated Department of Revenue tables are expected to give the precise 2026 number.
House Bill 337’s bracket expansion can matter most here. A couple that previously hit the higher rate sooner may now keep more taxable income in the 4.7% range, depending on their final taxable income after deductions.
Property taxes and the wider cost picture for new residents
Income taxes are only one part of what newcomers pay. The same notes that described the 2026 income tax brackets also flagged property tax changes happening on a separate track, including a new 1.9% flat for non-homesteads.
Immigrants who rent first and buy later often feel this indirectly. Landlords build property tax costs into rent, and buyers face escrow adjustments after assessment changes. That is why many relocation budgets fail: families plan only for rent and groceries, then discover payroll withholding, healthcare premiums, and housing-related taxes all pull from the same paycheck.
How federal changes interact without changing Montana’s brackets
Federal tax law changes can flow into Montana tax calculations because Montana starts from federal AGI. The notes referenced federal standard deduction changes tied to “OBBBA,” while emphasizing that federal changes do not alter Montana’s 2026 bracket rates.
Practical takeaway: even if Montana’s rates remain 4.7% and 5.65%, the income figure those rates apply to can change if federal rules change your AGI, above-the-line deductions, or other building blocks. That is one reason it is smart to treat Montana’s two-bracket system as easy to describe but still sensitive to your federal situation.
According to analysis by VisaVerge.com, state-level tax changes often become a hidden factor in where immigrant professionals choose to settle, because take-home pay affects every other immigration-related decision, from renewing status to buying a home.
Key takeaway: House Bill 337’s expanded 4.7% bracket gives many households more room before the 5.65% rate applies, but careful withholding and checking official tables are still essential.
What to watch for before you file
As 2026 approaches, Montana taxpayers will want to track three concrete items that affect real returns, especially for households new to the state:
- The final Department of Revenue 2026 tables for married filing jointly and head of household thresholds.
- Inflation adjustments to the thresholds, since Montana adjusts them annually.
- Any updates to the standard deduction minimums and maximums that can change taxable income even when wages stay flat.
For immigrants, the stakes are practical. A smaller tax bill can ease the first year in Montana. A surprise bill can hit at the same time as renewal fees, moving costs, or family reunification plans. House Bill 337’s expanded 4.7% bracket gives many households more room before the 5.65% rate applies, but the best results still come from careful withholding, clean records, and checking the state’s final published tables before filing.
Montana is transitioning to a two-bracket tax system for 2026, with rates of 4.7% and 5.65%. By nearly doubling the lower bracket’s reach via House Bill 337, the state aims to reduce the tax burden on middle-income households. This structure affects newcomers and immigrants by altering withholding and disposable income, necessitating careful planning for those with mixed income sources or complex residency statuses.
