Montana State Income Tax Rates and Brackets for 2025 Explained

Key Takeaways

• Montana’s 2025 tax rates: 4.7% up to threshold, 5.9% above; capital gains taxed lower.
• House Bill 337, signed April 2025, lowers top rate and raises thresholds starting 2026.
• Filing deadline for 2025 Montana tax returns is April 15, 2026; extensions possible.

Montana’s state income tax rates and brackets for 2025 bring important updates for residents, newcomers, and anyone considering a move to the state. These changes affect how much tax you’ll owe, what rates apply to your income, and how special types of income—like long-term capital gains—are treated. Understanding these updates is especially important for immigrants, families, and workers who want to plan their finances, file taxes correctly, and avoid surprises. Here’s a clear summary of what’s changed, who is affected, when the changes take effect, what actions you need to take, and what these updates mean for pending or future tax filings.

Summary of What Changed for 2025

For the 2025 tax year, Montana continues to use a two-bracket progressive income tax system. This means your income is taxed at different rates depending on how much you earn and your filing status. The main changes to be aware of for 2025 are:

• Income up to a certain amount is taxed at 4.7%.
• Income above that amount is taxed at 5.9%.
• Long-term capital gains (profits from selling assets held for more than a year) are taxed at lower rates than regular income.
• A new law, House Bill 337, was signed in April 2025 and will lower the top tax rate and raise the income threshold for the lower bracket, but these changes do not start until 2026.

If you are living, working, or planning to move to Montana in 2025, these rules will apply to your state income tax return for that year.

Who Is Affected by the 2025 Montana State Income Tax Rates

The updated tax brackets and rates affect:

• All Montana residents who earn taxable income, including U.S. citizens, permanent residents (green card holders), and immigrants with work authorization.
• Nonresidents who earn income from Montana sources (such as wages, rental income, or business profits in the state).
• People with different filing statuses, including:
  • Single
  • Married filing separately
  • Married filing jointly
  • Head of household
  • Qualifying surviving spouse
  • Estates and trusts
  • Pass-through entity (PTE) composite tax filers

If you are a newcomer to Montana, an international student, or a worker on a visa, you may also be required to file a Montana state income tax return if you have income from within the state. It’s important to check your residency status and income sources to know if you must file.

Effective Dates for the 2025 Tax Year

• The 2025 tax brackets and rates apply to income earned from January 1, 2025, through December 31, 2025.
• The filing deadline for 2025 Montana state income tax returns is expected to be April 15, 2026, unless you request an extension.
• Changes from House Bill 337—including a lower top tax rate and higher income thresholds for the lower bracket—will not take effect until the 2026 tax year.

If you are planning your finances or preparing to file your taxes, make sure you use the correct rates and brackets for the 2025 tax year.

Detailed Breakdown of Montana State Income Tax Rates and Brackets for 2025

Montana’s tax system uses two main brackets for ordinary income. The amount of tax you pay depends on your filing status and your taxable income (your total income minus deductions and exemptions).

Here are the 2025 brackets:

What This Means:

• If your taxable income is below the threshold for your filing status, you pay 4.7% on all of it.
• If your taxable income is above the threshold, you pay 4.7% on the amount up to the threshold and 5.9% on the rest.

Example Scenarios:

• Single filer earning $18,000: Pays 4.7% on all income.
• Married couple filing jointly earning $50,000: Pays 4.7% on the first $42,200, and 5.9% on the remaining $7,800.

Preferential Capital Gains Tax Rates for 2025

Montana gives special treatment to long-term capital gains (profits from selling assets like stocks, bonds, or property held for more than one year). These gains are taxed at lower rates than regular income.

Here’s how the capital gains tax rates work for 2025:

Key Points:

• The 3.0% rate applies to capital gains up to the threshold for your filing status.
• The 4.1% rate applies to capital gains above the threshold, or if your ordinary income is already above the threshold.
• This lower tax rate on capital gains can help investors, retirees, and anyone selling long-term assets save money compared to regular income tax rates.

Recent Legislative Changes and What’s Coming Next

In April 2025, Governor Greg Gianforte signed House Bill 337 into law. This bill will:

• Reduce the top marginal tax rate from 5.9% to 5.4% by 2027.
• Nearly double the income threshold for the 4.7% bracket starting in 2026.

However, these changes do NOT affect the 2025 tax year. They will start with the 2026 tax year and continue in 2027. If you are planning for the future, keep in mind that your tax rates and the amount of income taxed at the lower rate will improve in coming years.

Who Supported and Opposed the Changes?

• The bill was passed with strong support from Republican lawmakers, who argued it would make Montana more attractive for businesses and families by lowering taxes.
• Democratic lawmakers opposed the bill, saying it would reduce state revenue and could affect funding for public services.

What You Need to Do for 2025

If you live or work in Montana, or have Montana-source income, here’s what you should do for the 2025 tax year:

1. Check Your Filing Status: Make sure you know whether you are filing as single, married, head of household, or another status. This affects your tax bracket.
2. Calculate Your Taxable Income: Add up all your income, then subtract deductions and exemptions. This gives you your taxable income.
3. Apply the Correct Tax Rates: Use the 4.7% and 5.9% rates for ordinary income, and the 3.0% or 4.1% rates for long-term capital gains, based on your filing status and income level.
4. Claim Deductions and Exemptions: Montana allows standard deductions and special exemptions, including for seniors (age 65 and over) and contributions to a Montana Medical Savings Account (MSA).
5. File Your Return on Time: The deadline for 2025 returns is expected to be April 15, 2026. If you need more time, you can request an extension, but you must still pay any taxes owed by the deadline to avoid penalties.

Special Considerations for Immigrants and Newcomers

If you are new to Montana or the United States 🇺🇸, you may have questions about your tax obligations. Here are some important points:

• Residency Status: If you are a resident for tax purposes, you must report all income, even from outside Montana. Nonresidents only report Montana-source income.
• Visa Holders: Many work visas (such as H-1B, L-1, or TN) require you to file state taxes if you live or work in Montana.
• International Students: If you are on an F-1 or J-1 visa and have Montana-source income, you may need to file a state return, even if your federal income is exempt under a tax treaty.
• Social Security Numbers (SSN) or Individual Taxpayer Identification Numbers (ITIN): You need one of these numbers to file your state tax return. If you don’t have an SSN, you can apply for an ITIN using IRS Form W-7.

Implications for Pending Applications and Future Filings

If you have a pending immigration application, are waiting for a green card, or are planning to adjust your status, it’s important to:

• File your state taxes on time and keep copies of your returns. Immigration officials often ask for proof of tax compliance.
• Use the correct tax rates and brackets for the year you are filing. For 2025, use the rates listed above.
• Plan ahead for changes in 2026 and 2027. The new law will lower rates and raise thresholds, which may reduce your tax bill in future years.

Background and Historical Context

Montana has a history of keeping its income tax system simple and moderate. When Governor Gianforte took office in 2021, the top rate was 6.9%. Over the past few years, the state has gradually lowered the top rate to 5.9% for 2025. The two-bracket system makes it easier for most people to figure out their taxes, and the lower rates on capital gains encourage investment.

Standard Deductions and Exemptions

Montana allows taxpayers to claim a standard deduction or itemize deductions. There are also special exemptions for:

• Seniors (age 65 and over): Additional exemption amount.
• Contributions to a Montana Medical Savings Account (MSA): You can deduct qualified contributions, which can help lower your taxable income.

For detailed deduction amounts and eligibility, check the Montana Department of Revenue’s official tax forms and instructions.

Official Resources and Where to Get Help

• The Montana Department of Revenue provides official tax tables, deduction amounts, and filing instructions for each tax year. Their website is the best place to find up-to-date information and downloadable forms.
• You can also find legislative updates and bill texts on the Montana Legislature and Governor’s Office websites.
• For personalized help, consider using a tax preparation service or consulting a professional tax advisor.

According to analysis by VisaVerge.com, these changes keep Montana competitive with other states by offering moderate tax rates and special treatment for capital gains. The upcoming reductions in 2026 and 2027 are expected to make the state even more attractive for families, workers, and investors.

Actionable Takeaways and Next Steps

• Review your income and filing status to know which tax rates apply to you for 2025.
• Take advantage of deductions and exemptions to lower your taxable income.
• Plan for future changes—the top rate will drop and thresholds will rise starting in 2026, so your tax bill may go down in coming years.
• File your return on time and keep records, especially if you have a pending immigration application or plan to adjust your status.
• Visit the Montana Department of Revenue’s official website for the latest forms, instructions, and updates.

By staying informed about Montana’s state income tax rates and brackets for 2025, you can make smart decisions, avoid costly mistakes, and keep your finances on track—whether you’re a long-time resident, a newcomer, or someone considering a move to the state. If you have more questions or need help with your specific situation, don’t hesitate to reach out to a qualified tax professional or the Department of Revenue for guidance.

Learn Today

Two-bracket progressive system → Tax system taxing income at two rates depending on income level and filing status.
Long-term capital gains → Profits from selling assets held over one year taxed at preferential rates.
House Bill 337 → 2025 Montana law lowering top tax rate and raising income thresholds starting 2026.
Taxable income → Total income after deductions and exemptions used to calculate tax owed.
Filing status → Taxpayer category (single, married, head of household) affecting tax brackets and rates.

This Article in a Nutshell

Montana’s 2025 income tax rates feature a two-bracket system with rates of 4.7% and 5.9%. Long-term capital gains get lower rates. Key bill changes start in 2026. Filing by April 15, 2026, is crucial for residents, immigrants, and nonresidents with Montana income.
— By VisaVerge.com