Montana’s state income tax system is progressive, with tax rates increasing as income levels rise. For the current tax year, the brackets range from 1% for incomes up to $3,600 to 6.75% for incomes over $21,600. This system ensures that higher-income individuals pay a larger percentage of their earnings in taxes, thereby contributing more to the state’s revenue. Residents must file their state income tax returns by April 15th each year, with provisions for extensions if necessary. The process involves gathering all relevant income documents, completing the federal tax return first, and then using Montana Form 2 to report income and calculate tax liability. Here are the Montana income tax brackets for the current tax year:
| Income Range | Tax Rate |
|---|---|
| $0 – $3,600 | 1.00% |
| $3,601 – $6,300 | 2.00% |
| $6,301 – $9,700 | 3.00% |
| $9,701 – $13,000 | 4.00% |
| $13,001 – $16,800 | 5.00% |
| $16,801 – $21,600 | 6.00% |
| Over $21,600 | 6.75% |
These brackets apply to taxable income, which is calculated by taking your gross income and subtracting any allowable deductions and exemptions.
Filing Montana State Income Taxes
Filing your Montana state income taxes involves several steps:
- Collect all relevant tax documents, including W-2s, 1099s, and records of other income and deductions.
- Montana uses information from your federal tax return to calculate your state taxes, so ensure your federal return is accurate.
- Montana Form 2 is the state income tax return form. Use your federal return to complete it, entering your income, deductions, and credits as applicable.
- Use the tax brackets to determine your state income tax liability. Montana provides tax tables and instructions to assist with this calculation.
- You can file your Montana state income tax return electronically through the Montana Department of Revenue’s TransAction Portal (TAP) or by mailing a paper return.
Due Dates for Montana State Income Tax
Timely filing and payment of Montana state income taxes are crucial to avoid penalties and interest. Here are the key due dates:
- Tax Return Due Date: Montana state income tax returns are due by April 15th each year. If April 15th falls on a weekend or holiday, the due date is the next business day.
- Extension Request: If you need more time to file your return, you can request an extension using Form EXT-20. The extension gives you an additional six months to file, moving the due date to October 15th.
- Estimated Tax Payments: If you expect to owe more than $500 in state income taxes for the year, you must make estimated tax payments. These payments are due quarterly on April 15th, June 15th, September 15th, and January 15th of the following year.