Updated Montana Wage Withholding Tables and MW-4 Now Available

The department has updated its wage withholding tax tables, the Employer and Information Agent Guide, as well as the Montana Employee’s Withholding and Exemption Certificate Form MW-4. House Bill 337 from the 2025 Montana legislative session changed the tax brackets and lowered the top tax rate. Beginning January 1, 2026, the highest marginal tax rate will decrease from 5.9% to 5.65%, and the 4.7% lower rate will apply to income up to $95,000 for joint filers, $71,250 for Head of Household, and $47,500 for all other statuses.

Additionally, recent federal legislation changed the standard deductions amounts which affect Montana taxable income. The withholding tax tables were updated to also reflect these changes.

The method for calculating Montana wage withholding now closely resembles the federal method. Employees will no longer use Montana allowances, such as Montana personal and dependent exemptions and the Montana standard or itemized deductions, to calculate the amount of their Montana wage withholding. Instead, the calculation method will rely on the federal standard deduction amount for the employee’s federal filing status. Employees may still designate additional amounts to withhold from their paycheck or elect to have an amount of their choosing withheld from their paycheck. Specific exemptions to Montana wage withholding will not change.

The department encourages employers to review the updated Employer and Information Agent Guide including the tables and formulas. We also encourage employers to have copies of the updated Form MW-4 available for employees to revise their wage withholding for 2026. The department recommends a revised MW-4 be completed annually and also if the employee experiences any change in income or household situation such as marriage or divorce.

The updated guide and form are available now on our forms page.