Montana Retirement Income Tax Calculator

Retirement income tax calculation for Montana. Social Security is taxable at the federal level if combined income exceeds $25,000 (single) or $32,000 (married) — up to 85% may be taxed. This calculator excludes Social Security benefits from the STATE-taxable base entirely (many states exempt Social Security regardless of their general income tax treatment; this is a simplifying assumption, not a state-by-state verified exclusion list). 401(k)/IRA distributions and pension income are treated as fully state-taxable ordinary income. Montana's real progressive brackets (up to 5.65%) are applied marginally to pension/IRA/other retirement income, not as a single flat rate. Some states also exempt some or all pension income specifically — check Montana's specific exclusions, which this calculator does not model beyond the Social Security exclusion above. Federal tax uses the final 2026 brackets and standard deduction from IRS Revenue Procedure 2025-32, plus the section 63(f) additional standard deduction for age 65+ — $2,050 for a single filer and $1,650 per qualifying spouse (so $3,300 when both spouses are 65+ on a joint return). It does NOT apply the separate enhanced deduction for seniors under 26 U.S.C. §151(d)(5)(C) ($6,000 per qualified individual age 65+, claimed on Schedule 1-A Part V and phased out by 6% of MAGI over $75,000 single / $150,000 joint, available for tax years beginning before January 1, 2029). If you and your spouse are both 65+ and under that phase-out, the unmodelled deduction is worth up to $12,000 of additional federal deductions, so the federal tax shown here is deliberately CONSERVATIVE (too high) rather than optimistic — use the dedicated senior deduction calculator to model it.