Montana's second HB 337 step cuts the top rate and doubles the 4.7% band
The top rate falls from 5.9% to 5.65%, and the lower band more than doubles to $47,500 single and $95,000 joint. The widening is worth 2.65 times the rate cut.
House Bill 337 of the 2025 Montana session phases in over three tax years, and 2026 is the middle step. From January 1, 2026, the top rate falls from 5.9% to 5.65%, and the 4.7% band ends at $47,500 for a single filer, $95,000 filing jointly and $71,250 for head of household — up from $21,100 and $42,200.
The band widening does most of the work. Holding Montana taxable income at $58,900, the 2025 schedule charged $3,221.90 and the 2026 one charges $2,876.60. Of that $345.30 saving, only $94.50 comes from the rate cut; $250.80 comes from moving $26,400 of income out of the 5.65% band and into the 4.7% one.
A third step follows in tax year 2027, taking the top rate to 5.4% and the band to $65,000 single and $130,000 joint.
Montana also reissued its wage withholding tables and Form MW-4. The withholding method now follows the federal one, relying on the federal standard deduction for the employee’s filing status rather than separate Montana allowances.