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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
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
Montana’s Tax Day is the same as the deadline for filing your federal income tax return — April 15. If the 15th falls on a Sunday or holiday, the deadline may be extended.
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
Montana income tax rate(s)
For the 2018 tax year, Montana has seven tax brackets based on income.
- $1–$3,000 — 1% of taxable income
- $3,001–$5,200 — 2% of taxable income minus $30
- $5,201–$8,000 — 3% of taxable income minus $82
- $8,001–$10,800 — 4% of taxable income minus $162
- $10,801–$13,900 — 5% of taxable income minus $270
- $13,901–$17,900 — 6% of taxable income minus $409
- More than $17,900— 6.9% of taxable income minus $570
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 2018, 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 $4,580 but not less than $2,030
- Married filing jointly or head of household — Maximum of $9,160 but not less than $4,060
Additionally, you can take a personal exemption of $2,440 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 2018, include the following:
- Unemployment compensation
- Military pay for Montana residents who are on active duty
- 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.
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
- Real estate taxes
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.
- File your single-state and federal return with Credit Karma Tax®, which never charges any fee, regardless of your age, income or other factors.
- 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. For 2017, filing late carried a minimum penalty of $50 or 5% of the outstanding tax per month, up to a maximum of 25% of the tax due. Paying late could mean a penalty of 0.5% per month up to 12% of the tax due.
Interest on unpaid or underpaid taxes is 4% annually, compounded daily.
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.
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 Tax®, Janet Murphy is a CPA candidate 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.