Montana tax deductions and write-offs (2026)

Partly. Eligible retirees can exempt the lesser of 50% of their military retirement pay or their Montana wage, business, or farm income, for 5 consecutive years. To qualify, a retiree must have become a resident after June 30, 2023, or been a resident before starting to receive retired pay. Survivor Benefit Plan recipients can exempt 50% of survivor benefits whether or not they have other income. SB 124 (2025) repealed the 2033 sunset. Retirees who don't meet the residency rules, or who are past their 5 years, are fully taxed. Other retirement income: Pensions and 401(k)/IRA withdrawals are taxable; the former partial pension exemption was repealed. Taxpayers 65+ get a general senior subtraction ($5,660 per person in 2025, inflation-indexed) that can offset retirement income.

Partly. Pensions and 401(k)/IRA withdrawals are taxable; the former partial pension exemption was repealed. Taxpayers 65+ get a general senior subtraction ($5,660 per person in 2025, inflation-indexed) that can offset retirement income. Classified as partial because of the general age-65 subtraction, which applies to any income rather than only retirement income. the 2025 figure is shown.

Yes. Montana taxes Social Security to the same extent it is included in federal taxable income and has no Social Security-specific exemption. Taxpayers 65 and older get a general subtraction from any income: $5,500 base, indexed for inflation ($5,660 per person for 2025; double for joint filers when both spouses are 65+). The statutory rule is 2024 law, with no change found for 2026.

Yes: Montana offers the Montana Earned Income Tax Credit, 20% of the federal EITC for 2026 (doubled from 10%) (refundable). Montana residents who claim the federal EITC. HB 337 (2025) set the 20% rate starting in tax year 2026. The DOR's credit page still showed 10% when checked.

Rarely: Montana has no statewide sales tax, so deducting state income tax is almost always bigger. No general sales tax; designated resort communities (e.g., Big Sky, Whitefish, West Yellowstone) may levy a local resort tax of up to 3%, plus up to 1% more for infrastructure.

Yes on your federal return if you itemize, within the $40,400 SALT cap. Montana adds its own break: Elderly Homeowner/Renter Credit: refundable, up to $1,150, for age 62+ with household income under $45,000.

Yes: Montana offers the Elderly Homeowner/Renter Credit. Refundable credit of up to $1,150 for older Montanans where 15% of rent paid counts as property tax, claimed on Schedule 2EC with Form 2. Age 62+ by December 31; lived in Montana at least nine months and rented or owned there at least six months; gross household income under $45,000, with the credit phasing down above $35,000.

For 2026 Montana taxes ordinary income at 4.7% up to $47,500 (single/MFS), $71,250 (HoH) or $95,000 (MFJ) and 5.65% above (down from 5.9%), with the top rate scheduled to fall to 5.4% in 2027.

Sometimes: only the county option tax (where adopted) is value-based, and it's deductible if you itemize. Counties may levy up to 0.7% of depreciated MSRP; the state registration fee itself is age-based and not deductible.

Yes on your Montana return: $4,600 single / $9,200 joint per return. Contributions to any state's 529 plan count. Indexed from 2026 (HB 845); account owner must be taxpayer, spouse, or MT-resident child; 5.9% recapture tax on nonqualified withdrawals.

No: Montana doesn't offer a state child tax credit. No child tax credit or child and dependent care credit. Montana does have an earned income credit: 20% of the federal EITC for 2026 (doubled from 10%).

Yes, as a business expense: Montana charges $35 to form an LLC; ongoing: $20 annual report (fee waived if filed by April 15 in 2026 and 2027). Due April 15; $35 total if late. The $0 waiver is temporary, so check the current-year fee.