====== Do you earn tips? Montana now taxes them. ======

> Among several changes to Montana’s income tax system that took effect at the beginning of the year is a provision that makes income from tips subject to state taxes.

> The shift aligns Montana with the federal tax system, in which tips have long been taxed alongside salaries and wages. It also means that many service-sector workers will likely have their state income tax obligation increased by hundreds of dollars a year.

> Montana’s top-bracket tax rate, which now applies to annual taxable incomes over $20,500, is 5.9%. That means that many service sector workers will owe an additional $5.90 in state taxes for every $100 of tip income they report on their tax filings.

> “It’s just not fair — it makes no sense for these individuals to not have to pay their fair share of taxes on just a particular type of income that they get,” [Sen. Greg Hertz, R-Polson] said.

> Democrats pushed to keep the exemption, saying it is unfair to increase taxes on workers who are in many cases scraping to get by.

> “We’re talking about our lowest-income Montanans here,” said then-Senate Minority Leader Jill Cohenour, D-East Helena.

[[https://montanafreepress.org/2024/01/18/tips-now-taxable-income-for-montana-income-taxes/|Montana Free Press: Do you earn tips? Montana now taxes them.]]