Montana does not tax Social Security benefits
Montana exempts all Social Security retirement, survivor, and disability benefits from state income tax. If Social Security is your only income source, you will owe nothing to Montana, even if you have substantial benefits. This exemption applies whether you receive benefits as a retiree, a surviving spouse or child, or someone with a disability.
The exemption is automatic—you do not need to file a separate form or claim it on your return. When you file your Montana tax return, Social Security income straightforward does not count toward your taxable income. However, you may still need to file a return for other reasons, such as reporting wages, investment income, or other earnings.
Key Takeaways
- Montana excludes all Social Security benefits from state income tax, regardless of how much you receive or your total household income.
- The exemption covers retirement benefits, survivor benefits, and disability benefits paid by the Social Security Administration.
- You do not need to claim the exemption or file extra paperwork—it is automatic when you report your income.
- The federal government may still tax your Social Security benefits depending on your combined income, even though Montana will not.
How Montana's exemption works on your state return
When you file your Montana tax return, Social Security income is excluded from the income calculation. You will not enter it on the main income lines, and it will not increase your state tax liability. This is different from some states that tax Social Security partially or fully, or that explore different rules based on your age or income level.
If you receive a Social Security statement or 1099-SSB form from the Social Security Administration, that document is for your records and for federal tax purposes. Montana's Department of Revenue does not require you to report that amount on your state return. The exclusion is built into Montana's tax code and applies to everyone receiving Social Security, regardless of filing status or other income.
Federal taxation of Social Security is separate from Montana taxes
While Montana does not tax your benefits, the federal government may. Federal tax on Social Security depends on your "combined income"—a calculation that includes your adjusted gross income, tax-exempt interest, and half of your Social Security benefits. If your combined income exceeds certain thresholds, up to 85 percent of your benefits may be subject to federal income tax.
The federal thresholds are $25,000 for single filers and $32,000 for married couples filing jointly. These thresholds have not changed since 1984 and do not adjust for inflation, so more people become subject to federal taxation on their benefits each year. You will report any federal tax owed on your federal return (Form 1040), not on your Montana return.
What counts as Social Security income under Montana law
Montana's exemption covers all payments from the Social Security Administration, including retirement benefits for workers age 62 and older, survivor benefits paid to spouses and children after a worker's death, and disability benefits (SSDI) paid to workers and their family members. The exemption also includes benefits paid to divorced spouses who meet the requirements, and benefits paid to children of retired, disabled, or deceased workers.
The exemption does not cover Supplemental Security Income (SSI), which is a separate federal program for low-income individuals. SSI is not Social Security and is taxed under different rules. If you receive both Social Security and SSI, only the Social Security portion is exempt from Montana tax. You can distinguish between them on your 1099 form—Social Security appears on a 1099-SSB, while SSI appears on a 1099-SSI.
Other Montana tax considerations if you have Social Security
Even though Social Security is not taxed, you may still owe Montana income tax if you have other income. Wages, self-employment income, interest, dividends, rental income, and distributions from retirement accounts (like IRAs or 401(k)s) are all taxable in Montana. If your only income is Social Security, you will owe no state tax, but if you work part-time or have investment income, that income is subject to Montana's tax rates.
Montana also has a pension and retirement income exclusion that may reduce your tax on certain retirement account withdrawals. If you are over 59½ and withdraw from an IRA or 401(k), you may be able to exclude up to $10,000 of that income from Montana taxation. This is separate from the Social Security exemption and has its own rules and limits.
Filing requirements when you receive Social Security
You must file a Montana return if your income (excluding Social Security) exceeds the filing threshold for your age and filing status. For 2024, the threshold is $15,100 for single filers under 65 and $19,100 for those 65 and older. If your only income is Social Security, you do not meet the threshold and do not have to file a Montana return.
However, you may want to file anyway if you are owed a refund of taxes withheld from other income, or if you are claiming the property tax reduction for seniors and disabled persons. The property tax reduction is a separate benefit that requires filing a return or a specific form with your county assessor. Check with your county or a tax preparer to see if you benefit from filing even when you are not required to.
Frequently Asked Questions
Will Montana tax my Social Security if I move there from another state?
No. Montana's exemption applies to all residents receiving Social Security, regardless of where they lived before or how long they have been in the state. If you move to Montana and start receiving Social Security, that income will not be taxed by Montana.
What if I work part-time and also receive Social Security?
Your Social Security remains exempt from Montana tax. Your wages are taxable and must be reported. If your total income (wages plus other sources, but not Social Security) exceeds the filing threshold, you must file a Montana return and pay tax on the wages.
Do I need to report my Social Security on my Montana return at all?
No. You do not enter Social Security income anywhere on your Montana return. It is completely excluded. You only report income that is actually taxable in Montana, such as wages, self-employment income, or retirement account distributions.
If the federal government taxes my Social Security, does Montana also tax it?
No. Federal and state taxes are separate. If you owe federal tax on your Social Security benefits, you will pay that to the IRS on your federal return. Montana will not tax any portion of your Social Security, regardless of what the federal government does.
Does the Montana exemption explore to my spouse's Social Security if we file jointly?
Yes. Both spouses' Social Security benefits are exempt from Montana tax if you file a joint return. Each person's Social Security is excluded, and neither amount counts toward your household income for Montana tax purposes.