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MontanaHB 33769th Legislature, Regular Session (2025)HouseWALLET

Revise income tax laws to lower income taxes

Sponsored By: Brandon Ler (Republican)

Signed by Governor

Taxation--Individual IncomeRevenue, StateTaxation

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 0 costs, 1 mixed.

Bigger refundable Earned Income Tax Credit

Beginning with tax year 2026, the Montana Earned Income Tax Credit equals 20% of your federal EITC. The credit is refundable, so you can get money back even if you owe no state tax. If your earned income is treated as a dividend from an agricultural organization under federal law (section 501(d)), that income does not count and your state credit is cut by the same share.

Lower income and capital gains taxes

For tax year 2026, Montana taxes ordinary income at 4.7% up to $95,000 (married filing jointly or surviving spouse), $71,250 (head of household), and $47,500 (single, married filing separately, and estates/trusts). Income above those amounts is taxed at 5.65%. Net long‑term capital gains are taxed at 3.0% up to the same thresholds (reduced by nonqualified taxable income) and 4.1% above; if your nonqualified taxable income meets or exceeds the threshold, all your net long‑term gains are taxed at 4.1%. Starting in 2027, more income is taxed at 4.7%: up to $130,000 (married filing jointly or surviving spouse), $97,500 (head of household), and $65,000 (single, married filing separately, and estates/trusts), and income above those amounts is taxed at 5.4%.

New inflation formula for tax brackets

Starting with the 2028 tax year, the Department of Revenue updates tax brackets each year using a modified inflation factor that swaps the June 2023 CPI with the June 2026 CPI. The department rounds bracket amounts to the nearest $100. New bracket amounts are set by November 1 for the following tax year.

Sponsors & Cosponsors

Sponsor

  • Brandon Ler

    Republican • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 282 • No: 212

Senate vote • 4/22/2025

Do Concur

Yes: 34 • No: 16

Senate vote • 4/18/2025

Do Concur As Amended

Yes: 32 • No: 18

Senate vote • 4/18/2025

AMD-HB0337.003.002 Dunwell D/PASS

Yes: 14 • No: 36

Senate vote • 4/18/2025

AMD-HB0337.003.001 Hertz D/PASS

Yes: 47 • No: 2

House vote • 4/2/2025

Do Pass

Yes: 55 • No: 40

House vote • 4/1/2025

Do Pass

Yes: 58 • No: 42

House vote • 4/1/2025

AMD-HB0337.002.001 Thane DO PASS

Yes: 42 • No: 58

Actions Timeline

  1. Chapter Number Assigned

    4/28/2025House

  2. Signed by Governor

    4/28/2025House

  3. Transmitted to Governor

    4/25/2025House

  4. Signed by President

    4/25/2025Senate

  5. Signed by Speaker

    4/25/2025House

  6. Returned from Enrolling

    4/25/2025House

  7. Sent to Enrolling

    4/23/2025House

  8. 3rd Reading

    4/22/2025Senate

  9. Revised Fiscal Note Received

    4/22/2025House

  10. 2nd Reading

    4/18/2025Senate

  11. 2nd Reading Motion to Amend

    4/18/2025Senate

  12. 2nd Reading Motion to Amend

    4/18/2025Senate

  13. Revised Fiscal Note Requested

    4/17/2025House

  14. Committee Report

    4/16/2025Senate

  15. Committee Executive Action

    4/16/2025Senate

  16. Hearing

    4/4/2025Senate

  17. Referred to Committee

    4/3/2025Senate

  18. 1st Reading

    4/3/2025Senate

  19. Transmitted to Senate

    4/3/2025House

  20. 3rd Reading

    4/2/2025House

  21. 2nd Reading

    4/1/2025House

  22. 2nd Reading Motion to Amend

    4/1/2025House

  23. Committee Report

    3/29/2025House

  24. Committee Executive Action

    3/28/2025House

  25. Fiscal Note Printed

    3/3/2025House

Bill Text

  • Enrolled

    4/23/2025

    PDF

  • As Amended (Version 4)

    4/18/2025

    PDF

  • As Amended (Version 3)

    4/17/2025

    PDF

  • As Amended (Version 2)

    2/20/2025

    PDF

  • Introduced

    1/29/2025

    PDF

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