Montana State Taxes: What You’ll Owe in the 2026 Tax Season

The state taxes the portion of Social Security income that is included in federal taxable income.

How is property taxed?

The average property tax rate is 0.61 percent of a home’s assessed value, although actual rates vary by county. The lowest rate is 0.2 percent in Carter County, while the highest is 1.26 percent in Liberty County. The lowest median rate paid was $598 in Wibaux County, while the highest was $4,150 in Missoula County, according to the most recent data from the Tax Foundation.

What about sales and other taxes?

• Sales tax: Montana doesn’t have sales tax.
• Gas and diesel: Gasoline is taxed at 33 cents per gallon and special fuel, including diesel, is taxed at 29.75 cents per gallon.
• Vehicle tax: Montana doesn’t tax the sale of vehicles, as the state has no general-use sales tax.
• Alcohol: All liquor sold at state control stores has a retail sale price that includes a 40.5 percent state markup, except for wine that contains between 16 and 24 percent alcohol, which has a 51 percent markup.
• Lottery: On any prize of more than $5,000, the state withholds 5.9 percent for Montana state taxes and 24 percent for federal taxes.

Will my heirs or estate have to pay inheritance and estate tax?

Montana has no inheritance or estate tax.

Are there any tax breaks for older residents?

• Elderly homeowner/renter credit: This property tax relief program provides a refund tax credit of up to $1,150. To be eligible, Montana residents must be 62 or older as of Dec. 31 of the tax year for which they are applying, lived in the state for at least nine months, rented, owned or lease a home in the state for at least six months and have a total household income of less than $45,000. The benefit is a refundable credit on your individual income tax. The amount of the credit is calculated based on household income, rent and property taxes. The form for calculating and applying for the benefit can be found here.
• Property tax assistance program: Residents can have the assessed valuation of their property for tax purposes reduced by 30 percent, 50 percent or 80 percent of the first $418,000 of their home’s market value. To be eligible in 2026, residents must own and live in their home as a primary residence for at least seven months of the year, have a 2024 federal adjusted gross income of less than $29,037 for single residents, or $38,917 for those married or head of household. A spouse’s income must be included in the 2024 income calculation, regardless of whether they co-own the home. Single filers are eligible for an 80 percent reduction if their income is $14,286 or less; a 50 percent reduction if it’s $14,287 to $19,532; and 30 percent if it’s $19,533 to $29,037. Those who are married or heads of household may receive an 80 percent reduction if their income is $19,249 or less; 50 percent reduction if their income is $19,250 to $29,085; or 30 percent if their income is $29,086 to $38,917. Applications are available here.
• Disabled veteran assistance program: This program reduces the property tax rate on the homes of disabled veterans who have a Department of Veterans Affairs disability rating of 100 percent disabled and their surviving spouses. Applicants must provide a letter from the VA verifying their disability. To be eligible, residents must own a home and live in it as a primary residence for at least seven months of the year. The income limits are $62,598 for single residents, $72,229 for those who are married or head of household, and $54,573 for unmarried surviving spouses. Those unmarried surviving spouses must have a letter from the VA showing their spouse died in active duty or died from a disability related to service, or was rated 100 percent disabled at the time of their death. The reductions based on income guidelines and filer type are below:

Are military retirement pensions taxed?

Military pensions are taxed like other income in Montana.

What is the deadline for filing taxes in 2026?

State tax returns for 2025 were due April 15, 2026. If a taxpayer requested an automatic six-month extension, they have until Oct. 15 to file their state return, although taxes due should have been paid by April 15. Federal taxes for 2025 would typically be due on April 15, 2026, although the IRS extended the deadline to May 1 for Montana residents affected by severe storms and flooding that began Dec. 10, 2025. When receiving a federal extension, residents are automatically granted a state extension, though state taxes due must still be paid by April 15.

More AARP Financial Resources

• AARP Retirement Calculator Determine if you are saving enough to retire when — and how — you want.
• AARP Social Security Calculator Figure out when to claim and how to maximize your Social Security benefits.
• AARP Tax Tools Explore resources to help you calculate and prepare taxes.