Military Retirement in Montana: Complete 2026 Tax Guide
FULL military retirement pay exemption + NO sales tax
Quick Summary: Montana Military Retirement Taxes (2026)
- ✓ Military retirement pay: 100% EXEMPT from state tax
- ✓ VA disability payments: Tax-free (federal and state)
- ✓ Sales tax: ZERO - Montana has NO sales tax!
- ✓ Social Security: Partially taxed (federal rules apply)
- ✓ Property tax: Veterans exemptions available
Why Montana Is Excellent for Military Retirement
Montana offers a rare combination: FULL exemption on military retirement pay plus ZERO sales tax. This double tax advantage, combined with stunning natural beauty and an outdoor lifestyle, makes Big Sky Country an exceptional choice for military retirees.
The Treasure State hosts Malmstrom Air Force Base in Great Falls, operating the Minuteman III ICBM strategic deterrence mission. Over 90,000 veterans call Montana home, enjoying access to Glacier National Park, Yellowstone, and millions of acres of public lands.
2026 Montana Military Retirement Tax Breakdown
State Income Tax on Military Retirement Pay
100% Exempt!
Montana exempts ALL military retirement pay from state income tax. This includes regular retirement, reserve retirement, and disability retirement from all branches. No age restrictions, no income limits - your entire military pension is tax-free.
No Sales Tax!
✓ Zero Sales Tax
Montana is one of only 5 states with NO statewide sales tax. This saves retirees thousands annually on everyday purchases, vehicles, and major purchases.
Other Tax Benefits for Montana Veterans (2026)
| Benefit | Details |
|---|---|
| Property Tax |
|
| Sales Tax | ZERO - No sales tax in Montana! |
| Vehicle Registration | No sales tax on vehicles. Disabled veteran plates available. |
| Hunting/Fishing | Discounted licenses for disabled veterans. Free combination license for 100% disabled. |
Real Example: How Much You'll Save in Montana (2026)
Example Scenario: E-7 Retired After 20 Years
- • Military retirement pay: $2,800/month ($33,600/year)
- • VA disability (50%): $1,176/month ($14,112/year)
- • Part-time job: $20,000/year
Montana (100% Exempt + No Sales Tax)
Military retirement: $0 state tax
Only civilian income taxed (~$1,200)
+ ~$800/yr sales tax savings
Total tax: ~$1,200
California (9.3% Bracket)
Most income taxed + 7.25% sales tax
State tax: ~$3,500+
Annual Montana Savings: $2,300+
Cost of Living in Montana (2026)
Montana's cost of living varies significantly by region:
| Area | vs. National Average | Notes |
|---|---|---|
| Great Falls (Malmstrom AFB) | -5% lower | Most affordable, $300K median home |
| Billings | Average | Largest city, $380K median home |
| Missoula | +10% higher | University town, $550K median home |
| Bozeman | +30% higher | Resort area, $750K+ median home |
Major Military Installations in Montana
🚀 Malmstrom Air Force Base
- Located in Great Falls
- 341st Missile Wing
- Minuteman III ICBM operations
- 3,800+ military & civilian
- Strategic nuclear deterrence mission
🛡️ Montana National Guard
- Headquarters in Helena
- Army & Air National Guard
- Units across the state
- Fort Harrison (Helena)
- Great Falls ANG Base
Best Cities in Montana for Military Retirees (2026)
| City | Nearby Base | Median Home | Why It's Great |
|---|---|---|---|
| Great Falls | Malmstrom AFB | $300,000 | Most affordable, base access, gateway to Glacier NP |
| Helena | Fort Harrison (NG) | $450,000 | State capital, VA clinic, historic downtown |
| Billings | NG/Reserve | $380,000 | Largest city, VA clinic, best healthcare in state |
| Missoula | NG/Reserve | $550,000 | University town, cultural hub, fly fishing paradise |
| Kalispell | NG/Reserve | $600,000 | Gateway to Glacier NP, stunning scenery |
VA Healthcare in Montana
- VA Montana Healthcare System - Fort Harrison (Helena)
- Billings VA Clinic - Full outpatient services
- Great Falls VA Clinic - Near Malmstrom AFB
- Missoula VA Clinic - Western Montana services
- Miles City VA Clinic - Eastern Montana
- Community-Based Outpatient Clinics - Anaconda, Kalispell, Bozeman, and more
- Note: Complex care may require travel to larger VA facilities
Education Benefits for Veterans & Families in Montana
Montana offers education benefits including the Montana Veterans' Education Waiver and in-state tuition for all veterans.
Montana Veterans' Fee Waiver
Reduced Tuition for Eligible Veterans
Montana offers fee waivers for veterans at Montana University System schools. Combat-decorated and Purple Heart recipients receive enhanced benefits.
Montana University Tuition Rates (2026)
| Institution | In-State | Out-of-State | Savings |
|---|---|---|---|
| University of Montana | ~$7,800 | ~$28,000 | $20,200/yr |
| Montana State University | ~$8,200 | ~$28,000 | $19,800/yr |
Official Resources: Montana Veterans Affairs Division
Pros and Cons of Retiring in Montana
✅ Pros
- ✓ FULL military retirement tax exemption
- ✓ ZERO sales tax - saves thousands!
- ✓ Stunning natural beauty
- ✓ Glacier & Yellowstone National Parks
- ✓ World-class hunting and fishing
- ✓ Low population density, wide open spaces
- ✓ Clean air and water
- ✓ Friendly, tight-knit communities
- ✓ Great Falls very affordable
❌ Cons
- ✗ Harsh, cold winters
- ✗ Limited healthcare in rural areas
- ✗ Long distances between cities
- ✗ Resort areas (Bozeman, Whitefish) expensive
- ✗ Limited major employer options
- ✗ Few direct flights out of state
- ✗ Only one major Air Force base
Frequently Asked Questions
Does Montana tax military retirement pay?
No. Montana provides a FULL exemption for all military retirement pay. Your entire pension is tax-free at the state level.
Does Montana have sales tax?
No! Montana is one of only 5 states with ZERO sales tax. This provides significant savings on all purchases.
What military bases are in Montana?
The main installation is Malmstrom Air Force Base in Great Falls, operating the Minuteman III ICBM mission. Montana also has National Guard facilities including Fort Harrison in Helena.
Is Great Falls a good place for military retirees?
Yes! Great Falls offers affordable housing (~$300K median), proximity to Malmstrom AFB, access to Glacier National Park, and all of Montana's tax advantages at a lower cost of living than resort areas.
Calculate Your Montana Retirement Income
See exactly what you'll keep with 100% tax-exempt military retirement + no sales tax
Use the Free Calculator →Bottom Line for Montana Military Retirement
Montana offers a rare double tax advantage: full military retirement exemption PLUS zero sales tax. Combined with stunning natural beauty, world-class outdoor recreation, and affordable living in cities like Great Falls, Montana is an excellent choice for military retirees who love the outdoors and don't mind cold winters.