MONTANA RETIREMENT INCOME TAX · TAX YEAR 2026
Does Montana tax Social Security and retirement income?
Montana taxes the same share of benefits as the federal return, up to 85%, because it starts from federal taxable income and has no Social Security subtraction. Montana taxes pensions and 401(k) and IRA withdrawals at its regular rates, and each person 65 or older subtracts $5,660 (latest published, 2025) from any income. A single 67-year-old with $24,000 of Social Security, a $20,000 private pension and $10,000 of IRA withdrawals pays $540 in Montana income tax for 2026.
Your estimate
- Montana income tax
- $540.03
- Federal income tax
- $1,810.00
- Total income tax
- $2,350.03
Subtracted from Montana income
- Age 65 subtraction
- $5,660.00
Not yet published for 2026: Age 65 subtraction per person $5,660 (latest published, 2025).
The 50% military retirement subtraction (needs Montana earned income) and Tier 1 railroad retirement are not modeled.
Montana tax at different retirement incomes
Montana income tax for 2026 on a single 67-year-old with $24,000 of Social Security, and on a married couple, both 67, with $20,000 each. Half the pension and IRA income is a private pension and half IRA withdrawals, all received by one spouse in the couple.
| Pension and IRA income | Single | Married |
|---|---|---|
| $20,000 | $0 | $0 |
| $40,000 | $1,410 | $37 |
| $60,000 | $2,425 | $1,653 |
| $100,000 | $4,821 | $3,533 |
| $150,000 | $7,815 | $6,401 |
Does Montana tax Social Security?
Yes. Montana taxes benefits to the extent they are federally taxable, because it starts from federal taxable income. Filers 65 or older get a subtraction from any income, and railroad retirement benefits are exempt.
Of the single 67-year-old's $24,000 in benefits, $11,300 is federally taxable and Montana taxes $11,300 of it. Of the couple's $40,000, $28,100 is federally taxable and Montana taxes $28,100 of it.
Does Montana tax pensions?
Yes. Private and government pensions are taxed in full, as on the federal return; Montana repealed its partial pension exemption from 2024. Each person 65 or older subtracts $5,660 (latest published, 2025) from any income, including pensions. Military retirees with Montana earned income can subtract up to half of their military retirement pay, limited to that earned income; the calculator does not model it.
State tax for a single 67-year-old with $24,000 of Social Security, a $20,000 pension of each type and $10,000 of IRA withdrawals. Excluded is the part of the pension Montana exempts; age deductions that apply to any income are not counted.
| Pension | Excluded | State tax |
|---|---|---|
| Private | $0 | $540 |
| Montana government | $0 | $540 |
| Federal civil service | $0 | $540 |
| Military | $0 | $540 |
Does Montana tax IRA and 401(k) withdrawals?
Yes. IRA and 401(k) withdrawals are taxed in full, as on the federal return, with no exclusion. Qualified Roth IRA withdrawals are not taxed.
With $24,000 of Social Security, $20,000 of IRA withdrawals and no other income, a single 67-year-old pays no Montana income tax for 2026.
At what age do retirement tax breaks start in Montana?
At 65. Each person 65 or older subtracts $5,660 (latest published, 2025) from any income, and because Montana starts from federal taxable income, the federal extra standard deduction at 65 also applies.
State tax at each age where the rules change. The single filer has $24,000 of Social Security, a $20,000 private pension and $10,000 of IRA withdrawals; the couple, both that age, has $20,000 of Social Security each and a $30,000 pension and $20,000 of IRA withdrawals.
| Age | Single | Married |
|---|---|---|
| 64 | $1,184 | $2,157 |
| 65Age 65 subtraction | $540 | $906 |
What the calculator leaves out
The 50% military retirement subtraction (needs Montana earned income) and Tier 1 railroad retirement are not modeled.
- Montana starts from federal taxable income, so the federal 65+ standard deduction and the $6,000 senior deduction flow through.
The calculator uses Montana rules from the 2025 forms and instructions, the latest published.
Figures not yet published for 2026
- Age 65 subtraction per person: $5,660 (latest published, 2025).
Federal tax uses the 2026 brackets, the standard deduction with the extra amount at 65, and the $6,000 senior deduction. Estimates assume no other deductions, credits or local taxes except as noted.