State Income Tax
: 1% to 6.9% State Sales Tax
: None Estate Tax/Inheritance Tax
Montana, known as The Treasure State, isn't sharing its riches with retirees. Although it is one of five states that does not impose a sales tax, the good news ends there. The state taxes most forms of retirement income, including Social Security benefits, and its top 6.9% tax rate kicks in when taxable income tops a mere $16,000 for both individuals and married couples. Taxpayers 65 and older can exclude up to $1,600 of interest income from state taxes. Low-income residents qualify for a small pension and annuity income exemption. Real estate is assessed at 56% of fair market value, after accounting for a homestead exemption available to homeowners of any age. Homeowners 62 and older and with incomes of less than $45,000 may qualify for a tax credit.
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