TAXES 18-34, Montana State Income Tax Withholding

Published: March 21, 2018
Effective: Pay Period 07, 2005


This tax bulletin is being updated to remove the number of pay periods in steps 4 and 7 and replace with the phrase "number of pay dates in the tax year," thereby preventing any confusion in future years. All other information in this bulletin remains the same.

No action on the part of the employee or the personnel office is necessary.

Tax Formulas

State Abbreviation:


State Tax:


Acceptable Exemption From:


Basis for Withholding:

State Exemptions

Acceptable Exemption Data:

S/M, Number of Exemptions

TSP Deferred:


Special Coding:


Additional Information:


Withholding Formula (Effective Pay Period 07, 2005)

  1. Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
  2. Subtract the nontaxable biweekly Federal Health Benefits Plan payment(s) (includes flexible spending account - health care and dependent care deductions) from the amount computed in step 1.
  3. Add the taxable biweekly fringe benefits (taxable life insurance, etc.) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
  4. Multiply the adjusted gross biweekly wages by the number of pay dates in the tax year to obtain the annual wages.
  5. Determine the exemption allowance by applying the following guideline and subtracting this amount from the result of step 4 to compute the taxable income.

    Exemption Allowance = $1,900 x Number of Exemptions

  6. Apply the taxable income computed in step 5 to the following table to determine the annual Montana tax withholding:

    Tax Withholding Table

    If the Amount of Taxable Income Is:

    The Amount of Montana Tax Withholding Should Be:

    Over $0 but not over $7,000


    Over $7,000 but not over $15,000

    $126 plus 4.4% of excess over $7,000

    Over $15,000 but not over $120,000

    $478 plus 6.0% of excess over $15,000

    Over $120,000

    $6,778 plus 6.6% of excess over $120,000

  7. Divide the annual Montana tax withholding by the number of pay dates in the tax year and round to the nearest dollar to obtain the biweekly Montana tax withholding.


To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the National Finance Center (NFC) homepage. Select the Publications tab and select U.S. Income Tax Formulas from the Publications menu to launch the tax map. Select the desired State from the map provided for the formula.

Previous Tax Bulletin


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