Montana 2024 rate in Turbotax seems too low

[tomglass5]

I'm using turbotax for my 2024 Montana state taxes. I'm married filing jointly, and our household total taxable income was over $42,200. According to this sheet, our tax rate should be 5.9%:

https://mtrevenue.gov/wp-content/uploads/dlm_uploads/2024/11/2024-Tax-Rates-and-Deductions.pdf

However, the tax calculated by turbotax reflects a 5.41% rate. I'm not claiming any state credits or additional deductions. What am I missing?

[KeshaH]

If you'd like, we can look at your return and see exactly what you see to  help come to a resolution. The return will be scrubbed and won't include any of your personal details.

If you're using TurboTax Online:

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

If you're using TurboTax Desktop:

• Click on Online in the top menu of TurboTax Desktop for Windows
• Select 'Send Tax File to Agent'
• Write down or send an image of your token number and state then place in this issue.
• We can then review your exact scenario for a solution

Please reply to this message with your token so that we can further assist you. Let us know all the states, if any, that are included on the return.

[tomglass5]

Thanks for your help. Token # 1281014. Just Montana.

Tom

[KeshaH]

Thank you for sharing your token.

The difference that you're seeing is because Montana uses a graduated tax rate rather than applying a single, flat rate to all of your income. While your income does put you in the 5.9% tax bracket, not all of your income is taxed at that rate.

The first $41,000 is taxed at 4.7%, the rest of it is taxed at 5.9%. This creates a blended, or effective, rate that's lower than the 5.9%.

[dtsny]

Hi, I had the same thing happen to me and I think it may have to do with some changes they made a few years ago that went into effect in 2024. 

https://www.ktvh.com/news/big-changes-coming-to-montanas-income-tax-structure

It sounds like you already got help but I wanted to share this article with you in case you didn't know! I just read about it this morning.