Department of Revenue Reminds Employees to Review Montana Wage Withholding – Tax News You Can Use

June 17, 2024

Legislation passed in 2021 enacted major changes to Montana’s income tax system , including lower income tax rates and adjustments to how Montana wage holding is calculated.

Beginning January 1, 2024:

  1. the highest marginal tax rate decreased from 6.75% to 5.9%
  2. tax rates are now based on the filing status used by the taxpayer on the federal income tax return (Form 1040).

Due to these changes, the department reminds employees to review their Montana wage withholding to ensure it accurately reflects what they may owe when they file their 2024 Montana tax return. Having too much withheld means that a taxpayer may get a refund when they file their return, but that they will have less take-home pay during the year. Not having enough withheld means the taxpayer may owe taxes, and possibly penalty and interest, when they file their return.

Taxpayers subject to wage withholding may use our Withholding Calculator  to determine if enough taxes are being withheld from their paycheck or other income payment.

For more information and to adjust the amount you would like withheld from your payment, please complete a new Form MW-4 and give it to your employer or payer.

Note: these changes will be reflected on the 2024 Form 2 when filed in 2025.