Montana Withholding Tax Tables - Montana Department Of Revenue - 2005
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11Montana Department of Revenue
Don Hoffman
Judy Martz
Acting Director
Governor
Montana Withholding Tax Tables
Significant Changes for 2005
The Montana Economic Development Tax Act (Senate Bill 407) was passed by the
2003 Legislative Assembly to provide comprehensive tax reform, including a reduction
of individual income tax rates.
The state tax rate table has been revised to provide for seven tax brackets with
marginal rates ranging from 1% to 6.9%. The tax rate reductions are effective
beginning with tax year 2005.
The department has revised the withholding tax tables for tax year 2005 to reflect these
new tax rates and tax brackets. The revised 2005 Withholding Tax Tables are now
available on the department’s website at
(click
on Forms & Resources / Downloadable Forms / Withholding Forms). In addition, a
booklet will be mailed to employers in November 2004.
These additional individual income tax changes, associated with the Montana Economic
Development Tax Act, are effective beginning with tax year 2005.
•
The current full deduction for federal income taxes paid during the tax year is
capped at $5,000 ($10,000 if married and filing jointly).
•
A new tax credit equal to 1% of the net capital gains is in effect for 2005 and
2006. This percentage increases to 2% beginning in tax year 2007.
•
The personal exemption and standard deduction amounts in current law were
adjusted to accommodate a new base year (tax year 2005) from which
adjustments to these items are calculated. The base amount for calculating
exemptions has increased from $800 to $1,900. The base amount for calculating
the standard deduction has increased from $665 to $1,580.
If you have any questions regarding the changes to the withholding tax tables or other
changes associated with the Montana Economic Development Tax Act, please call the
department’s Customer Service Center at (406) 444-6900.
Customer Service (406) 444-6900
TDD (406) 444-2830
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