Does Montana tax 401k withdrawals?

Yes. Montana taxes 401k and IRA withdrawals as ordinary income at up to 4.7%. On a $50,000 annual withdrawal, that is $2,350 in state tax per year. Factor this into your Roth vs traditional 401k decision.

What is the 401k contribution limit in 2026?

The 2026 401k contribution limit is $23,500 for employees under 50, plus a $7,500 catch-up contribution for those 50 and older. In Montana, the combined pre-tax tax savings at a 22% federal rate plus 4.7% state rate is $6,275 per year on a full contribution.

Should I do a traditional or Roth 401k in Montana?

In Montana, traditional 401k contributions reduce your tax bill today by 26.7%, but withdrawals will be taxed at up to 4.7% state + federal rate. Roth 401k contributions are post-tax but grow tax-free. If you expect to be in a lower tax bracket at retirement, traditional wins. If equal or higher, Roth is better.

Not Financial Advice. CalcMoney provides calculators for educational and planning purposes only. Results are estimates and do not constitute financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Terms apply.

CALCMONEY // 401K ANALYZER // MT

Montana 401k Analyzer 2026

Montana taxes 401k distributions at up to 4.7%. Contributing pre-tax saves $6,275/year at 22% federal + 4.7% state.

Analyze Your 401k

2026 Contribution Limit

$23,500

Annual Tax Savings (22% + state)

$6,275

State Taxes Distributions

Yes

30yr Balance (max contrib)

$2,219,828

401k Projections in Montana

MAX ANNUAL CONTRIBUTION — 7% ANNUAL RETURN — AFTER-TAX WITHDRAWAL AT 26.7%

Horizon	Gross Balance	After-Tax Value (MT)	Annual Contribution Savings
20 years	$963,394	$706,168	$6,275/yr
30 years	$2,219,828	$1,627,134	$6,275/yr

Montana 401k Rules: What Matters

MT RETIREMENT TAX CONTEXT

The 2026 401k contribution limit is $23,500 ($31,000 if you are 50+). In Montana, pre-tax contributions reduce your taxable income at both federal (22%–37%) and MT state (4.7% flat) levels. Annual tax savings on a full contribution: $6,275.

Montana taxes 401k and traditional IRA distributions as ordinary income at up to 4.7%. On a $60,500/year retirement income, that is $2,844 per year in state tax. Consider Roth 401k contributions if you expect to retire in MT and your future bracket is similar to today.

Montana also taxes Social Security benefits. High 401k withdrawal amounts can push your provisional income above thresholds that trigger Social Security taxation at the state level. Roth conversions before RMD age can reduce this risk.

Related Calculators

401k Analyzer Roth Conversion Retirement Calculator Social Security