States / Montana
MT state income tax · checked October 14, 2026
Does Montana tax tips and overtime?
No. Montana starts from federal taxable income, so the tips and overtime you deduct federally aren’t taxed by Montana.
| Montana return | Tips | Overtime |
|---|---|---|
| 2025 | Not taxed (follows federal) | Not taxed (follows federal) |
| 2026 | Not taxed (follows federal) | Not taxed (follows federal) |
The details
Montana’s 2025 Form 2 instructions carry the federal deductions through federal taxable income, with no state add-back.
2026 Montana forms weren’t out when we checked; nothing in the law changes this for 2026.
The federal deductions apply either way. See who qualifies for no tax on tips, how the overtime deduction works, and where both go on Schedule 1-A.
States with the same 2026 treatment
All 50 states and D.C. · Missouri · Nebraska
Questions
Does Montana tax tips in 2026?
For 2026, Montana doesn’t tax the qualified tips you deduct on your federal return.
Does Montana tax overtime in 2026?
For 2026, Montana doesn’t tax the qualified overtime you deduct on your federal return.
What about my 2025 Montana return?
For 2025, Montana doesn’t tax the qualified tips you deduct on your federal return. For 2025, Montana doesn’t tax the qualified overtime you deduct on your federal return.
Does the federal deduction still apply?
Yes. Whatever your state does, you can still claim the federal deductions on Schedule 1-A if you qualify: up to $25,000 of qualified tips per return and up to $12,500 of qualified overtime ($25,000 joint), phasing down above $150,000 of MAGI ($300,000 joint).