ARM 42.17.105. COMPUTATION OF WITHHOLDING

(1) Employers shall calculate the state income tax amount to withhold from employees according to the length of the payroll period, the employee's net taxable earnings, the employee's federal filing status, and any extra withholding reported on Form MW-4, using the department's "Montana Withholding Tax Tables." The tables are based on the formulas provided in (2) and (3) and show the amount to withhold each pay period. (2) Montana withholding tables are based on the following annual withholding formulas as adjusted annually for inflation and changes to federal tax parameters. Wage withholding is equal to the following amounts based on the employee's federal filing status: (a) Single or married filing separately: (i) 0% of the first $14,600; plus (ii) 4.7% of the next $20,500; plus (iii) 5.9% of the net taxable earnings over $35,100. (b) Married filing jointly or qualifying widow(er): (i) 0% of the first $29,200; plus (ii) 4.7% of the next $41,000; plus (iii) 5.9% of the net taxable earnings over $70,200. (c) Head of household: (i) 0% of the first $21,900; plus (ii) 4.7% of the next $30,750; plus (iii) 5.9% of the net taxable earnings over $52,650. (3) Withholding formulas for nonannual payroll periods are calculated by dividing the dollar amounts for annual payroll in (2) by the ratio of the number of working days in a year to the number of working days in the payroll period. The following table shows payroll periods and the corresponding divisors: Payroll Period Divisor Monthly 12 Semi-Monthly 24 Biweekly 26 Weekly 52 Daily 365 (4) By the end of each tax year, the department shall adjust the withholding formulas for inflation by either multiplying the dollar amounts in (2) by the inflation factor defined in 15-30-2101, MCA, or by updating the values based on the adjusted amounts provided by the IRS for the new tax year. (5) If the department determines that the inflation adjustment is immaterial, it may keep existing withholding tables in effect for another year.