How to file a Montana income tax return

A scenic view of Glacier National Park in Montana illustrates the state's nickname Big Sky Country. State residents may have to file a Montana income tax return.Image: A scenic view of Glacier National Park in Montana illustrates the state's nickname Big Sky Country. State residents may have to file a Montana income tax return.

In a Nutshell

Due to the COVID-19 pandemic, Montana has extended its filing and payment deadline for 2019 income taxes to July 15, 2020.  
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This article was fact-checked by our editors and CPA Janet Murphy, senior product specialist with Credit Karma. It has been updated for the 2019 tax year.

Montana may have more grizzly bears, migratory elk and trumpeter swans than any other state in the continental U.S., but it’s one of the least-human-populated states, with a little more than a million residents.

When your home state has 46 (out of 56) counties with average populations of fewer than six people per square mile, every taxpayer counts! If you lived in or earned income in Big Sky Country, you’ll likely need to file a Montana income tax return.

Here’s some information to help you get started.

The basics of Montana state tax

Taxing body

The Montana Department of Revenue manages state income tax in Montana. Montana DOR’s tax help number is 1-406-444-6900, and you can reach the DOR from 8 a.m. to 5 p.m. Monday through Thursday, and 9 a.m. to 5 p.m. on Fridays. The department is closed on weekends and state holidays. You can also ask state income tax questions via the DOR contact form.

Filing and payment deadline

For 2019 state taxes, the state has extended the filing and payment deadline. Montana residents now have until July 15, 2020, to file their state returns and pay any state tax they owe for 2019. As with the federal deadline extension, Montana won’t charge interest on unpaid balances between April 15 and July 15, 2020.

While this year is a bit different, Montana’s Tax Day is generally April 15, the same as the deadline for filing your federal income tax return. If the 15th falls on a Sunday or holiday, the deadline may be extended.

Filing statuses

Montana recognizes these filing statuses:

  • Single, which includes qualifying widow(er)s
  • Married filing jointly
  • Married filing separately on separate forms
  • Married filing separately on the same form
  • Married filing separately and spouse not filing
  • Head of household
How does filing status affect your federal income tax bill?

Montana income tax rate(s)

For the 2019 tax year, Montana has seven tax brackets based on income.

  • $1–$3,100 — 1% of taxable income
  • $3,101–$5,400 — 2% of taxable income minus $31
  • $5,401–$8,200 — 3% of taxable income minus $85
  • $8,201–$11,100 — 4% of taxable income minus $167
  • $11,101–$14,300 — 5% of taxable income minus $278
  • $14,301–$18,400 — 6% of taxable income minus $421
  • More than $18,400— 6.9% of taxable income minus $587

Montana deductions and credits to know

In Montana, you can either take a standard deduction or itemize your deductions. When married filing separately, both spouses must claim either the standard deduction or itemize their deductions.

Standard deductions, exemptions and subtractions

For 2019, you can take a Montana standard deduction of 20% of your Montana adjusted gross income or the maximum standard deduction for your filing status, whichever is less. Here are the maximum standard deductions.

  • Single or married filing separately — Maximum of $4,710 but not less than $2,090
  • Married filing jointly or head of household — Maximum of $9,420 but not less than $4,180

Additionally, you can take a personal exemption of $2,510 for yourself, your spouse and each dependent.

Subtractions and above-the-line deductions

Like many states, Montana also uses subtractions to help you arrive at your Montana taxable income. You don’t have to itemize deductions to take these subtractions if you’re eligible. Some subtractions that are available for 2019, include the following:

  • Unemployment compensation
  • Military pay for Montana residents who are on active duty (provided your compensation was included in your federal adjusted gross income)
  • Up to $800 of interest income if you’re 65 or older at the end of the tax year (couples married filing jointly can exempt up to $1,600)
  • Up to $5,000 of health-related-student-education loan repayments for health professionals licensed in Montana, provided you qualify

You can also deduct certain expenses like the following, regardless of whether you itemize deductions:

  • If you took a deduction for educator expenses on your federal form, you can also deduct it on your Montana income tax return.
  • You can deduct the amount of contributions to a health savings account that you reported on your federal tax return.
  • If you took a deduction for IRA contributions on your federal return, you can deduct that amount on your Montana return.
  • You can deduct the same amount of student loan interest you deducted on your federal return.

Who can claim the federal standard deduction?

Most people can choose to take a standard deduction on their federal income tax return.

However, you might not be able to claim the standard deduction if you’re married filing separately and your spouse itemizes deductions, if you file a return for a period of less than 12 months before you changed your accounting period, or if you file as an estate, trust, common trust fund or partnership.

Itemized deductions

Deductions you may be able to itemize include the following:

  • Medical and dental expenses
  • Medical and long-term-care insurance premiums
  • Personal property taxes
  • Home mortgage interest
  • Charitable contributions
  • Political contributions, limited to $100 (plus another $100 for your spouse)
  • Real estate taxes
What are some federal college tax credits?

Available state tax credits include the following:

  • Adoption credit — $1,000 per eligible child adoption. Legal adoption of a stepchild does not qualify for the credit.
  • Alternative-energy system credit — Up to $500 for installation of a qualifying new alternative-energy system in your home.
  • Elderly care credit — If you paid qualified expenses on behalf of an elderly family member who is 65 or older or was determined disabled for Social Security purposes, you may be eligible for this credit. It’s worth up to 30% of qualified expenses based on adjusted gross income. The maximum credit is $5,000 for a single family member or $10,000 for two or more family members.
  • Montana elderly homeowner/renter credit — Up to $1,000 and the credit is refundable. If it reduces your tax to zero, you can get the balance of the credit as a refund. To qualify, you must be age 62 or older, a Montana resident for at least nine months, live in the same house for six months, and have a household income of less than $45,000.

How to file your Montana state tax return

You have multiple options for filing and paying your Montana state income tax.

  • E-file through the Montana DOR My Revenue system.
  • E-file using a Free File Alliance vendor. Be aware, vendors will have varying criteria for who qualifies to file for free. You may need to meet age, income or other limitations in order to qualify.
  • Download forms, including Form 2 — the Montana equivalent of the federal 1040 — through the Montana DOR website.

If you’re filing a paper form, complete Form 2 and send it to one of these addresses:

  • If you’re due a refund or don’t owe any money: Montana Department of Revenue, P.O. Box 6577, Helena, MT 59604-6577
  • Returns with payment: Montana Department of Revenue, P.O. Box 6308, Helena, MT 59604-6308

If you owe and can’t pay

If you can’t make your full tax payment, pay as much as you can by the filing deadline and request a payment plan for the balance through the Montana DOR TransAction Portal. You’ll need to create an account.

Keep in mind, filing late and/or paying taxes after the due date could cause the state to assess penalties and interest on the unpaid balance.

Tracking your Montana tax refund

Montana has a Where’s My Refund? tool to help you track your state refund. Your refund status may be available after one week for e-filers and six weeks for paper filers. It can take up to 90 days for Montana DOR to issue your refund.

Bottom line

The state of Montana’s motto is “gold and silver.” Hopefully, you’ll have more change in your pocket if a refund is headed your way. A fairly straightforward progressive tax system and a robust Department of Revenue website with ample tax information could help make filing your Montana income tax return as easy as possible.

A senior product specialist with Credit Karma, Janet Murphy is a CPA with more than a decade in the tax industry. She’s worked as a tax analyst, tax product development manager and tax accountant. She has accounting degrees and certifications from Clemson University and the U.S. Career Institute. You can find her on LinkedIn.

About the author: Deb Hipp is a freelance writer with a bachelor’s degree in English and creative writing from the University of Missouri-Kansas City. When she’s not writing about personal finance and news, she enjoys traveling to seas… Read more.