Federal Taxes and Montana Taxes for Active Duty or Combat Zones

Military Members in Combat Zones do not pay Federal Taxes

Although any base pay earned by a member of the armed services while serving in a combat zone is excluded from federal income tax, it is still subject to Social Security tax and Medicare tax.

• For enlisted service members, the amount of the exclusion from federal income tax is unlimited.
• For officers, the exclusion is limited to the maximum amount of enlisted pay.
• States vary on whether or not the federal combat pay tax exclusion applies to state income taxes.

source: QuickBooks: Combat Pay, Tax Style: Benefits When Serving in a Hot Zone

Montana does not tax active duty pay. 

(2) (a) The salary received from the armed forces by residents of Montana who are serving on active duty in the regular armed forces and who entered into active duty from Montana is exempt from state income tax.

Source: Montana Tax