Key figures
Montana advisory
2026, with sources
Montana is not an at-will state
Montana’s Wrongful Discharge from Employment Act makes a discharge wrongful if it is not for good cause after the employee has completed the probationary period, if it retaliates for refusing to violate or reporting a violation of public policy, if it breaks the employer’s own written personnel policy, or if it is solely for the employee’s legal free speech. During probation, either side can end the job for any reason.
If the employer doesn’t set a probationary period before the employee starts, the law sets one of 12 months; it can be extended, but not beyond 18 months in total. For a startup this is a hiring-document question: an offer letter and handbook that set the probationary period, and personnel policies the company will actually follow.
Incentives and personal taxes
Montana has no general research credit. The Jobs Growth Incentive credit equals half of the employer’s Social Security and Medicare tax on qualifying new employees, for tax years 2022 through 2028, once DLI certifies the employer; it is nonrefundable and carries forward 10 years.
For founders, Montana’s individual rates are 4.7% and 5.65% in 2026 (the top rate falls to 5.4% in 2027, with wider brackets). North Dakota residents working in Montana can claim the reciprocity exemption on Form MW-4.
The federal baseline
This page covers what Montana adds. The federal rules underneath it apply here too.
Common questions
Can we fire a Montana employee at will?
No — Montana is the one state where employment is not at-will after a probationary period. Under the Wrongful Discharge from Employment Act, once an employee completes the probationary period (12 months if the employer sets none), a discharge without good cause is wrongful. Startups hiring in Montana should set the probationary period in writing before the start date.
Does Montana have an R&D credit?
There is no general R&D credit on Montana’s list of income tax credits. The broadly available incentive is the Jobs Growth Incentive credit: half of the employer’s FICA on qualifying new Montana employees, for tax years through 2028, nonrefundable with a 10-year carryforward, after DLI certifies the employer.
Advisory next door
- IDIdaho advisoryIdaho follows federal law closely, including QSBS; its 5% research credit is nonrefundable and, since 2026, can’t be claimed on costs also deducted under §174A.
- NDNorth Dakota advisoryNorth Dakota’s research credit is 25% on the first $100,000 of excess expenses and can be sold by certified primary sector startups. WSI is the only workers’ comp carrier.
- SDSouth Dakota advisoryNo income tax means no R&D credit, NOL or QSBS question. The planning in South Dakota is about sales tax on services and SaaS.
- WYWyoming advisoryWyoming has no income tax for companies or people, so R&D credits, QSBS and NOL questions don’t arise; the planning issues are sales tax on downloaded software and keeping the registration current.
Founder guides on this
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- RunwayBurn rate and runway: how to calculate them correctlyGross burn, net burn and months of runway, done the way an investor checks them: from cash, averaged, and with the hires you’ve already committed to.
More of the Montana guide
- AccountingAccounting and state tax in MontanaCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in MontanaSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in MontanaPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in MontanaWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in MontanaRegistering to do business, annual reports, franchise tax and the filing calendar
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.