Social Security
SS partially taxed
Federal rules still apply
2026Rank #45Montana Retirement Taxes
SS partially taxed · retirement income taxed · property 0.61% · sales 0%. Plan RMDs, Roth conversions, and estate tax before retiring in Montana.
By Sammy S. · Founder · AuthorUpdated for 2026
Montana retirement taxes snapshot
Still taxes some Social Security; other retirement income generally taxable. Rank #45 on this site's retiree-friendliness score (#1 is most favorable).
Retirement income
Retirement income taxed
Pensions / IRA / 401(k)
Estate / inheritance
No state estate/inheritance tax
Federal exempt ~$15M
Retiree rank
#45
Lower score = more friendly
Compare Montana with another state
Compare any two states
Social Security, pensions/IRA, estate taxes, and supporting property/sales rates.
Does Montana tax Social Security?
SS partially taxed
Partial SS taxation with AGI deductions/exclusions; confirm Montana Form 2 instructions.
Federally, up to 85% of Social Security can be taxable based on combined income. State treatment is a separate layer on top of IRS rules.
How Montana taxes pensions, IRA, and 401(k) withdrawals
Retirement income taxed
Other retirement income generally taxed; SS partially taxed.
Federal income tax on Social Security and retirement distributions can apply regardless of state rules.
Estate and inheritance taxes in Montana
No state estate/inheritance tax
Montana does not currently levy a state inheritance tax.
Federal estate tax may still apply above about $15M for 2026, regardless of state rules.
Property and sales taxes that affect retirees in Montana
Income-tax savings can be offset by higher housing or consumption taxes. These are statewide benchmarks—not the exact levy on a specific home or shopping basket.
Effective property tax
0.61%
Owner-occupied housing benchmark
Montana property tax profile → Combined sales tax
0%
State + average local combined rate
Montana sales tax profile →Federal vs Montana retirement taxes
Living in Montana does not remove federal tax on taxable Social Security, traditional IRA/401(k) withdrawals, capital gains, or a taxable estate above the federal exemption. Montana rules sit on top of IRS rules.
Federal Social Security
Up to 85% of benefits may be taxable based on combined income—same framework in every state.
Montana Social Security
SS partially taxed
Montana withdrawals
Retirement income taxed
Death taxes
No state estate/inheritance tax
Before you retire in Montana
Confirm Social Security treatment
Partial SS taxation with AGI deductions/exclusions; confirm Montana Form 2 instructions.
Confirm pension and IRA rules
Other retirement income generally taxed; SS partially taxed.
Estimate property tax on your home
Statewide effective property tax is about 0.61%. Check local homestead or senior relief.
Budget for sales tax
Combined average sales tax is about 0%. Necessities may be taxed differently.
Review estate or inheritance tax
Montana currently has no state estate or inheritance tax; federal estate tax may still apply.
Plan Roth conversions carefully
Conversions can raise Montana taxable income and, where relevant, Social Security state-tax thresholds.
How to read the Montana figures
Retiree rank
#45 on this site’s Social Security, retirement-income, and estate/inheritance score (#1 is most favorable).
Social Security badge
A planning label—not a guarantee for every AGI level or filing status.
Property & sales
Statewide benchmarks for cash-flow planning; your locality may differ.
Not modeled
Every local income tax, circuit breaker, homestead credit, or private pension nuance.
Related retirement planning tools
Related states by retiree-friendliness score
New MexicoRank #45 · SS partially taxed · Retirement income taxed
Compare Montana vs New Mexico →
UtahRank #45 · SS partially taxed · Retirement income taxed
Compare Montana vs Utah →
MarylandRank #44 · SS exempt from state tax · Retirement income taxed
Compare Montana vs Maryland →
ConnecticutRank #48 · SS partially taxed · Retirement income taxed
Compare Montana vs Connecticut →Montana retirement tax FAQs
Partial SS taxation with AGI deductions/exclusions; confirm Montana Form 2 instructions.
Other retirement income generally taxed; SS partially taxed.
Montana does not currently levy a state estate or inheritance tax. Federal estate tax may still apply above the federal exemption.
Effective owner-occupied property tax is about 0.61%. Combined average sales tax is about 0%.
Montana ranks #45 on this site's retiree-friendliness score (#1 is most favorable), based on Social Security, retirement-income, and estate/inheritance treatment.
Still taxes some Social Security; other retirement income generally taxable. Compare property tax, sales tax, healthcare costs, and housing before deciding.
Yes. Federal income tax on taxable Social Security, IRA/401(k) withdrawals, capital gains, and the federal estate tax framework still apply.
Use the pair selector on this page to compare Social Security treatment, retirement-income rules, estate/inheritance indicators, and supporting property and sales rates.
No. Federal taxability of Social Security depends on combined income under IRS rules, not on your state of residence. State tax is an additional layer.
A Roth conversion can increase taxable income in Montana and may affect Social Security state-tax thresholds where applicable. Model federal and state layers together before converting.
Confirm Social Security treatment, pension/IRA exclusions, property-tax homestead or senior relief, sales-tax rates on necessities, and whether Montana has an estate or inheritance tax. Local income taxes may also apply.
RMDs from traditional IRAs and 401(k)s are generally treated like other retirement withdrawals in Montana. Other retirement income generally taxed; SS partially taxed.
Confirm current Montana return instructions and local rules. Rankings are educational planning aids.