Asked about Montana individual income tax for self-employed persons, sole proprietors, or single-member LLCs.
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Section 1 metadata table
| Field | Value | |---|---| | Jurisdiction | Montana (US-MT) | | Tax type | Individual income tax | | Primary form | Form 2 (Montana Individual Income Tax Return) | | Tax year | 2025 (filed in 2026) / 2026 | | Authority | Montana Department of Revenue | | Statute | MCA 15-30-2103 et seq. | | Version | 0.1 | | Last updated | 2026-05-22 | | Validation | AI-drafted — Q3 |
Sources consulted
| # | Source | URL | |---|---|---| | 1 | Montana DOR — HB337: 2026–2027 Income Tax Changes | https://revenue.mt.gov/news/recent-news/HB-337 | | 2 | Montana Income Tax Rates (TY 2025) | https://remotelaws.com/state-income-tax/us-states/montana/ | | 3 | PolicyEngine — Montana Reduces Top Rate (HB337 analysis) | https://www.policyengine.org/us/research/montana-tax-cuts-2026 | | 4 | MCA 15-30-2103 (rate statute) | https://leg.mt.gov/bills/mca/title_0150/chapter_0300/part_0210/section_0030/0150-0300-0210-0030.html |
Ordinary income tax rates — TY 2025 (filed in 2026)
| Filing status | Lower bracket (4.7%) | Upper bracket (5.9%) | |---|---|---| | Single / MFS | $0 – $21,100 | Over $21,100 | | Head of Household | $0 – $31,700 | Over $31,700 | | MFJ / Surviving Spouse | $0 – $42,200 | Over $42,200 |
Ordinary income tax rates — TY 2026 (per HB 337)
| Filing status | Lower bracket (4.7%) | Upper bracket (5.65%) | |---|---|---| | Single / MFS | $0 – $47,500 | Over $47,500 | | Head of Household | $0 – $71,250 | Over $71,250 | | MFJ / Surviving Spouse | $0 – $95,000 | Over $95,000 |
Net long-term capital gains rates
| Capital gains income | Rate | |---|---| | Within the lower bracket (after subtracting ordinary income) | 3.0% | | Above the lower bracket threshold | 4.1% |
Standard deduction table
| Filing status | Amount | |---|---| | Single | $15,750 | | MFJ / Surviving Spouse | $31,500 | | Head of Household | $23,625 | | MFS | $15,750 |
Scope. This skill covers Montana Form 2 for full-year Montana residents who are sole proprietors or single-member LLC owners. Montana uses a two-bracket graduated income tax: 4.7% on lower income and 5.65% on higher income (TY 2026, per HB 337). Montana has NO general sales tax. Montana also applies separate, lower rates to net long-term capital gains.
Quality tier. Q3 — AI-drafted, not independently verified. All rates and thresholds were researched on 2026-05-22 from official Montana Department of Revenue publications. A qualified professional must review before filing.
Section 1 metadata table
| Field | Value |
|---|---|
| Jurisdiction | Montana (US-MT) |
| Tax type | Individual income tax |
| Primary form | Form 2 (Montana Individual Income Tax Return) |
| Tax year | 2025 (filed in 2026) / 2026 |
| Authority | Montana Department of Revenue |
| Statute | MCA 15-30-2103 et seq. |
| Version | 0.1 |
| Last updated | 2026-05-22 |
| Validation | AI-drafted — Q3 |
Sources consulted
| # | Source | URL |
|---|---|---|
| 1 | Montana DOR — HB337: 2026–2027 Income Tax Changes | https://revenue.mt.gov/news/recent-news/HB-337 |
| 2 | Montana Income Tax Rates (TY 2025) | https://remotelaws.com/state-income-tax/us-states/montana/ |
| 3 | PolicyEngine — Montana Reduces Top Rate (HB337 analysis) | https://www.policyengine.org/us/research/montana-tax-cuts-2026 |
| 4 | MCA 15-30-2103 (rate statute) | https://leg.mt.gov/bills/mca/title_0150/chapter_0300/part_0210/section_0030/0150-0300-0210-0030.html |
Ordinary income tax rates — TY 2025 (filed in 2026)
| Filing status | Lower bracket (4.7%) | Upper bracket (5.9%) |
|---|---|---|
| Single / MFS | $0 – $21,100 | Over $21,100 |
| Head of Household | $0 – $31,700 | Over $31,700 |
| MFJ / Surviving Spouse | $0 – $42,200 | Over $42,200 |
Ordinary income tax rates — TY 2026 (per HB 337)
| Filing status | Lower bracket (4.7%) | Upper bracket (5.65%) |
|---|---|---|
| Single / MFS | $0 – $47,500 | Over $47,500 |
| Head of Household | $0 – $71,250 | Over $71,250 |
| MFJ / Surviving Spouse | $0 – $95,000 | Over $95,000 |
Net long-term capital gains rates
| Capital gains income | Rate |
|---|---|
| Within the lower bracket (after subtracting ordinary income) | 3.0% |
| Above the lower bracket threshold | 4.1% |
Montana uses the federal standard deduction amount. For TY 2025:
Standard deduction table
| Filing status | Amount |
|---|---|
| Single | $15,000 |
| MFJ / Surviving Spouse | $30,000 |
| Head of Household | $22,500 |
| MFS | $15,000 |
Other deductions / subtractions table
| Item | Amount | Source |
|---|---|---|
| Age 65+ subtraction | $5,660 from federal taxable income (TY 2025) | MCA 15-30-2110 |
| Medical savings account deduction | Up to $4,600 | MCA 15-61-202 |
Key thresholds table
| Item | Value | Source |
|---|---|---|
| Filing deadline | April 15, 2026 (for TY 2025) | MCA 15-30-2604 |
| Extension | Automatic 6-month with federal extension | MCA 15-30-2604 |
| Estimated tax threshold | $500 expected liability after withholding and credits | MCA 15-30-2512 |
| No sales tax | Montana does not impose a general sales tax | — |
Montana taxable income begins with federal taxable income from federal Form 1040, Line 15 (after the federal standard or itemized deduction).
Tier 1 rules — deterministic table
| Rule ID | Rule | Source |
|---|---|---|
| MT-T1-01 | Start with federal taxable income (Form 1040, Line 15) | MCA 15-30-2101 |
| MT-T1-02 | Subtract interest on U.S. government obligations | MCA 15-30-2110 |
| MT-T1-03 | Subtract state income tax refund included in federal income | MCA 15-30-2110 |
| MT-T1-04 | Age 65+ subtraction: $5,660 from federal taxable income (TY 2025) | MCA 15-30-2110 |
| MT-T1-05 | Apply ordinary rates: 4.7% / 5.9% (TY 2025) or 4.7% / 5.65% (TY 2026) | MCA 15-30-2103, HB 337 |
| MT-T1-06 | Net long-term capital gains: 3.0% on gains within the lower bracket; 4.1% on gains above | MCA 15-30-2103 |
| MT-T1-07 | Montana EITC: 20% of federal EIC (refundable, TY 2026+) | HB 337 |
| MT-T1-08 | Personal exemption: eliminated effective TY 2024 | MCA 15-30-2114 |
| MT-T1-09 | Standard deduction: uses federal standard deduction amount | MCA 15-30-2101 |
| MT-T1-10 | No general sales tax in Montana | — |
Tier 2 rules — requires judgment table
| Rule ID | Rule | Guidance |
|---|---|---|
| MT-T2-01 | Residency determination — Montana uses a domicile test. A person domiciled in Montana or spending 180+ days in the state is presumed a resident. | If taxpayer has homes in multiple states, flag for professional review. |
| MT-T2-02 | Capital gains classification — Determine which gains are long-term (held > 1 year) vs. short-term. Only net long-term gains qualify for the 3.0%/4.1% preferential rates. | Review holding periods for all disposed assets. |
| MT-T2-03 | Capital gains bracket interaction — The 3.0% rate applies to capital gains that fall within the lower ordinary-income bracket (after subtracting Montana ordinary income from the threshold). | If ordinary income exceeds the lower bracket, all capital gains are taxed at 4.1%. |
| MT-T2-04 | Elderly homeowner/renter credit — Available to Montana residents age 62+ with household income below thresholds. | Income-based calculation; flag for review if taxpayer qualifies. |
| MT-T2-05 | Credit for taxes paid to other states — Non-refundable credit to prevent double taxation. | Requires the other state's return. |
| MT-T2-06 | Resort tax — Some Montana resort areas impose a local resort tax (up to 3%) on certain goods and services. Not an income tax, but self-employed persons in resort areas may need to collect it. | Flag if taxpayer operates in a resort community. |
Supplier pattern library table
| Pattern | Treatment | Notes |
|---|---|---|
| W-2 wages from Montana employer | MT withholding applies; include on Form 2 | Most common |
| Schedule C net profit (sole prop) | Flows through federal taxable income → Montana taxable income | No separate MT schedule |
| Rental income (Schedule E) | Included in federal taxable income → Montana taxable income | MT-source if property in MT |
| Interest on U.S. government bonds | Subtract from Montana taxable income | MCA 15-30-2110 |
| Social Security benefits | Only the amount included in federal taxable income flows through; Montana does not add back | — |
| Long-term capital gains | Preferential MT rates: 3.0% / 4.1% | Separate from ordinary income |
| Short-term capital gains | Taxed as ordinary income (4.7% / 5.65%) | No preferential rate |
| 1099-NEC freelance income | Flows through Schedule C → federal taxable income | Estimated payments likely needed |
Form mapping table
| Montana form / schedule | What it covers | Federal counterpart |
|---|---|---|
| Form 2 | Montana Individual Income Tax Return | Form 1040 |
| Schedule I (Form 2) | Additions and Subtractions to Federal Taxable Income | Schedule 1 (Form 1040) |
| Schedule II (Form 2) | Tax Computation (ordinary + capital gains) | N/A |
| Schedule III (Form 2) | Credits | N/A |
| Schedule IV (Form 2) | Non-resident / Part-year Allocation | N/A |
| Form ESA | Estimated Tax Payment Voucher | Form 1040-ES |
| Form EITC | Montana Earned Income Tax Credit | Schedule EIC |
Refusal catalogue table
| ID | Situation | Action |
|---|---|---|
| MT-R-01 | Part-year or non-resident return (Schedule IV) | Refuse — out of scope |
| MT-R-02 | Corporate income tax (Form CIT) | Refuse — out of scope |
| MT-R-03 | Partnership / S-corp pass-through returns | Refuse — out of scope |
| MT-R-04 | Multi-state income apportionment | Refuse — flag for professional review |
| MT-R-05 | Amended returns | Refuse — out of scope |
| MT-R-06 | Tax year other than 2025 or 2026 | Refuse — rates and thresholds may differ |
| MT-R-07 | Resort tax / local accommodation tax | Refuse — separate local tax; out of scope |
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Personal exemption elimination
Montana eliminated the personal exemption effective TY 2024.
Other deductions / subtractions table
| Item | Amount | Source | |---|---|---| | Age 65+ subtraction | $5,660 from federal taxable income (TY 2025) | MCA 15-30-2110 | | Medical savings account deduction | Up to $4,600 | MCA 15-61-202 |
Key thresholds table
| Item | Value | Source | |---|---|---| | Filing deadline | April 15, 2026 (for TY 2025) | MCA 15-30-2604 | | Extension | Automatic 6-month with federal extension | MCA 15-30-2604 | | Estimated tax threshold | $500 expected liability after withholding and credits | MCA 15-30-2512 | | No sales tax | Montana does not impose a general sales tax | — |
Montana EITC
20% of federal Earned Income Credit (refundable)HB 337
Tier 1 rules — deterministic table
| Rule ID | Rule | Source | |---|---|---| | MT-T1-01 | Start with federal taxable income (Form 1040, Line 15) | MCA 15-30-2101 | | MT-T1-02 | Subtract interest on U.S. government obligations | MCA 15-30-2110 | | MT-T1-03 | Subtract state income tax refund included in federal income | MCA 15-30-2110 | | MT-T1-04 | Age 65+ subtraction: $5,660 from federal taxable income (TY 2025) | MCA 15-30-2110 | | MT-T1-05 | Apply ordinary rates: 4.7% / 5.9% (TY 2025) or 4.7% / 5.65% (TY 2026) | MCA 15-30-2103, HB 337 | | MT-T1-06 | Net long-term capital gains: 3.0% on gains within the lower bracket; 4.1% on gains above | MCA 15-30-2103 | | MT-T1-07 | Montana EITC: 20% of federal EIC (refundable, TY 2026+) | HB 337 | | MT-T1-08 | Personal exemption: eliminated effective TY 2024 | MCA 15-30-2114 | | MT-T1-09 | Standard deduction: uses federal standard deduction amount | MCA 15-30-2101 | | MT-T1-10 | No general sales tax in Montana | — |
Tier 2 rules — requires judgment table
| Rule ID | Rule | Guidance | |---|---|---| | MT-T2-01 | **Residency determination** — Montana uses a domicile test. A person domiciled in Montana or spending 180+ days in the state is presumed a resident. | If taxpayer has homes in multiple states, flag for professional review. | | MT-T2-02 | **Capital gains classification** — Determine which gains are long-term (held > 1 year) vs. short-term. Only net long-term gains qualify for the 3.0%/4.1% preferential rates. | Review holding periods for all disposed assets. | | MT-T2-03 | **Capital gains bracket interaction** — The 3.0% rate applies to capital gains that fall within the lower ordinary-income bracket (after subtracting Montana ordinary income from the threshold). | If ordinary income exceeds the lower bracket, all capital gains are taxed at 4.1%. | | MT-T2-04 | **Elderly homeowner/renter credit** — Available to Montana residents age 62+ with household income below thresholds. | Income-based calculation; flag for review if taxpayer qualifies. | | MT-T2-05 | **Credit for taxes paid to other states** — Non-refundable credit to prevent double taxation. | Requires the other state's return. | | MT-T2-06 | **Resort tax** — Some Montana resort areas impose a local resort tax (up to 3%) on certain goods and services. Not an income tax, but self-employed persons in resort areas may need to collect it. | Flag if taxpayer operates in a resort community. |
Supplier pattern library table
| Pattern | Treatment | Notes | |---|---|---| | W-2 wages from Montana employer | MT withholding applies; include on Form 2 | Most common | | Schedule C net profit (sole prop) | Flows through federal taxable income → Montana taxable income | No separate MT schedule | | Rental income (Schedule E) | Included in federal taxable income → Montana taxable income | MT-source if property in MT | | Interest on U.S. government bonds | Subtract from Montana taxable income | MCA 15-30-2110 | | Social Security benefits | Only the amount included in federal taxable income flows through; Montana does not add back | — | | Long-term capital gains | Preferential MT rates: 3.0% / 4.1% | Separate from ordinary income | | Short-term capital gains | Taxed as ordinary income (4.7% / 5.65%) | No preferential rate | | 1099-NEC freelance income | Flows through Schedule C → federal taxable income | Estimated payments likely needed |
Form mapping table
| Montana form / schedule | What it covers | Federal counterpart | |---|---|---| | Form 2 | Montana Individual Income Tax Return | Form 1040 | | Schedule I (Form 2) | Additions and Subtractions to Federal Taxable Income | Schedule 1 (Form 1040) | | Schedule II (Form 2) | Tax Computation (ordinary + capital gains) | N/A | | Schedule III (Form 2) | Credits | N/A | | Schedule IV (Form 2) | Non-resident / Part-year Allocation | N/A | | Form ESA | Estimated Tax Payment Voucher | Form 1040-ES | | Form EITC | Montana Earned Income Tax Credit | Schedule EIC |
Refusal catalogue table
| ID | Situation | Action | |---|---|---| | MT-R-01 | Part-year or non-resident return (Schedule IV) | Refuse — out of scope | | MT-R-02 | Corporate income tax (Form CIT) | Refuse — out of scope | | MT-R-03 | Partnership / S-corp pass-through returns | Refuse — out of scope | | MT-R-04 | Multi-state income apportionment | Refuse — flag for professional review | | MT-R-05 | Amended returns | Refuse — out of scope | | MT-R-06 | Tax year other than 2025 or 2026 | Refuse — rates and thresholds may differ | | MT-R-07 | Resort tax / local accommodation tax | Refuse — separate local tax; out of scope |
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