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Montana withholding tax changes

Learn about changes to the Montana MW4 and withholding tax calculations for 2024

Beginning in Tax Year 2024, taxpayers will see changes to filing statuses, tax brackets, and the calculation of Montana taxable income. The Montana Department of Revenue has updated its withholding tax tables and the employee’s withholding and exemption certificate (Form MW-4). Beginning January 1, 2024, the highest marginal tax rate will decrease from 6.75% to 5.9%. Tax rates will now be based on the filing status the taxpayer uses on the federal income tax return (Form 1040).

Additional information on 2024 changes

The change to the method for calculating Montana wage withholding will be similar to the federal method. Employees will no longer use Montana allowances, such as Montana personal and dependent exemptions and the Montana standard or itemized deductions, to calculate the amount of their Montana wage withholding. Instead, the new calculation method will rely on the federal standard deduction amount for the employee’s federal filing status. Employees can still designate additional amounts to withhold from their paycheck or elect to have an amount they choose withheld from their paycheck. Specific exemptions to Montana wage withholding will not change.

What action should Montana employers take?

The Department of Revenue recommends that employers review the updated Employer and Information Guide. In addition, make the updated Form MW-4 available for newly hired employees or employees who want to revise their wage withholding for 2024. View the updated MT MW-4.

QuickBooks is updating our system to match the changes to the filing statuses and withholding tax calculations to make sure Montana employers using our products stay compliant. We will update our Montana payroll customers with additional information when these changes are applied in early 2024.

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