Montana
Individual Income Tax
Guide
For Tax Year
2015
For use in
AARP Tax Aide
VITA - Volunteer Income Tax Assistance
and other volunteer assistance programs
Please note-the information in this guide is intended to be used
for general reference and not cited as authority. Please contact
the Department with questions on specific situations.
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2015 Montana Individual Income
Tax
What’s New for 2015?
Changes and Developments
Allowable rent
 A claimant living in a healthcare, long-term care or residential care facility (nursing
home) who cannot get an adequate breakout of “rent” from other expenses limited
to $30 per day as rent beginning with the 2015 year forward
Individual due dates
 Because of the observance of Emancipation Day by the District of Columbia, the
normal April 15, 2016 due date for individual income tax returns and payments is
moved to April 18, 2016
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2015 Montana Individual Income
Tax
Filing Status
 Can the filing status on the Montana income tax return be different than the filing
status used on the federal return?—Yes!
 Montana has six filing statuses
1.
Single
o Federal requirements apply
2.
Married filing jointly
o Federal requirements apply
3a. Married filing separately on the same form
o Couples may use this status even if they elected to file a joint federal return
o General Rule: If both spouses have income, either individually or jointly, and
that income is more than the maximum standard deduction of $4,370 plus the
personal exemption of $2,330, it may be beneficial to use filing status 3a.
o Limitations on reporting income and deductions may apply (This will be
discussed further later in the material)
3b. Married filing separately on separate forms
o Must be used if spouses have different residency statuses
o May be used if couple does not want the overpayment from one spouse applied
to the tax due of the other (e.g. divorced after December 31)
o Couple may use this filing status when one spouse is considered an “injured
spouse”
o Will have to include other spouse’s social security number
3c.
Married filing separately and spouse not filing
o Use when both spouses are nonresidents and one spouse has no Montana
source income (the may still elect to file a joint return)
o Use when one spouse has Montana source income and the other spouse is a
nonresident who does not have Montana income
o Use when another taxpayer claims one spouse as a dependent
4.
Head of household
o Federal requirements apply
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2015 Montana Individual Income
Tax
Residency Requirements
 State of residency is not a federal tax issue but it is a state issue.
 Montana has three residency statuses
5a.
Resident full year
o Generally, most taxpayers you will be helping prepare their returns will be full
year Montana residents
o You are a resident if you live in Montana or if you maintain your permanent
home in Montana
o Cannot lose your Montana residency when you temporarily leave the state
o Among the factors used to determine residency are driver’s license, hunting and
fishing licenses, voting records and vehicle registration
5b.
Nonresident full year
o A person is a nonresident of Montana if they do not consider Montana their
home at any time during the tax year and have demonstrated that through their
actions (e.g. voting and driver’s license) even though they may have lived and
worked in Montana temporarily during the year
5c.
Resident part-year
o A person is a part-year resident of Montana if they moved into or out of
Montana during the year with the intention of establishing a permanent
residence in the state they moved to
o A part-year resident is a resident of Montana for part of the year and a
nonresident for the other part of the year
Filing Requirements
THEN you should file a return if your federal
gross income, excluding unemployment
compensation was at least…
Under 65
$4,370
Single, or married
filing separately
65 or older
$6,700
Under 65
$4,370
Head of Household
65 or older
$6,700
Both under 65
$8,740
Married filing jointly
One spouse 65 or older
$11,070
Both spouse 65 or older
$13,400
An individual who is blind is entitled to an additional exemption and should increase their
federal gross income by $ 2,330 to determine if they are required to file.
AND at the end of 2015 you
IF your filing status is…
were…
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2015 Montana Individual Income Tax
Personal Exemption
 State and federal personal exemptions are different
2015 personal exemption amount:

Montana
$2,330

Federal
$4,000
Additional personal exemption provisions for Montana:



Age 65 or older:
o An individual is allowed an additional exemption ($2,330) if he or she is age 65 or
older
o Form 2, lines 6a and 6b
Blind
o An individual is allowed an addition exemption ($2,330) if he or she is blind
o Form 2, lines 6a and 6b
Disabled dependent child
o An individual, or married couple who file jointly, is allowed an exemption equal
to twice the standard exemption ($4,660) if a dependent child is disabled
(sometimes referred to as an “additional exemption”)
 Blind or deaf do not qualify as a disability for this additional exemption as
those do not constitute a disability to more than 50% of the body as a
whole
o This does not apply to a disabled spouse or another disabled dependent such as
a parent who lives with you
o Identify which child is disabled on tax return
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2015 Montana Individual Income Tax
Income
 What is taxable and nontaxable income and where is it reported on the Montana income tax
return?
Determining Montana taxable income begins with:



Federal Adjusted Gross Income
Montana Form 2EZ, lines 3 through 6
Montana Form 2, lines 7 through 38
o You should have already entered the income and deduction information and reviewed
the federal return even if it turns out there is no federal filing requirement
o The information should transfer from the federal Form 1040, 1040A, or 1040EZ to one
of the Montana forms (2 or 2EZ)
o If you are filing as married filing separately on the same form for Montana and
jointly on the federal return, see discussion on the separation of income
o Line 38a. This is your combined federal adjusted gross income and should match the
amount reported as federal adjusted gross income on the corresponding federal return
Add to your federal adjusted gross income
Montana additions to federal adjusted gross income (see 2015 Montana Form 2, Schedule I)
o Interest and mutual fund dividends from other states’ state, county, or municipal bonds
(Form 2, Schedule I, line 1)
o Taxable federal refund (Form 2, Schedule I, line 3; Worksheet II)—to the extent they
reduced your tax in a prior year – Ref: tax benefit rule
o Additions to federal taxable social security (Form 2, Schedule I, line 5; Worksheet VIII)
o Others additions – (Review detailed information in the Form 2, Schedule I instructions)
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2015 Montana Individual Income Tax
Subtract from your Federal Adjusted Gross Income

Montana subtractions from federal adjusted gross income. (See 2015 Montana Form 2,
Schedule II or Form 2EZ, lines 7 and 8):
o Exempt interest and dividends from federal bonds, notes and obligations (Form 2,
Schedule II, line 1)
o Exempt tribal income (Form 2, Schedule II, line 2; Form ETM)
o Exempt unemployment compensation (Form 2, Schedule II, line 3 or Form 2EZ, line 7)
o Exempt workers’ compensation benefits (Form 2, Schedule II, line 4)
o State tax refunds included in Form 2, line 10 (Form 2, Schedule II, line 6)
o Exempt military salary of residents on active duty (Form 2, Schedule II, line 8)
o Exempt income of nonresident military service members (Form 2, Schedule II, line 9)
o Exempt life-insurance premiums reimbursements for National Guard members and
Reservists (Form 2, Schedule II, line 10)
o Partial pension and annuity income exemption (Form 2, Schedule II, line 11; Worksheet
IV)
o Partial interest exemption for taxpayers 65 and older (Form 2, Schedule II, line 12)
o Partial retirement disability income exemption for taxpayers under age 65 (Form 2,
Schedule II, line 13; Form DS-1)
o Exemption for certain taxed tips, gratuities and service charges (Form 2, Schedule II, line
14 or Form 2EZ, line 8)
o Medical care savings account deposits and exempt earnings (Form 2, Schedule II, line
18; Form MSA)
o First-time home buyer savings account deposits and exempt earnings (Form 2, Schedule
II, line 19; Form FTB)
o Family education savings account deposits (Form 2, Schedule II, line 20)
o Subtraction for federally taxable social security/Tier I Railroad Retirement (Form 2,
Schedule II, line 22; Worksheet VIII)
o Subtraction for federally taxable Tier II Railroad Retirement benefits (Form 2, Schedule
II, line 23)
o Other subtractions (Review detailed information in the Form 2, Schedule II instructions)
= Montana Adjusted Gross Income.
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2015 Montana Individual Income Tax
Common Montana Adjustments

Taxable social security {15-30-2110(2)(c) & (5), MCA; ARM 42.15.222}
Taxable amount based on other income including Montana adjustments
Married taxpayers filing a joint federal return split the base used to determine taxable amount
if filing separate Montana returns
Use Worksheet VIII (same as federal worksheet plus Montana adjustments)


Additions to Federal AGI
Interest and dividends from state, county, or municipal bonds from other states {15-302110(1)(a), MCA}
Common among states
Eligible for partial interest exemption for taxpayers 65 and older (discussed later)



Taxable federal refund {15-30-2110(1)(b), MCA; ARM 42.15.205}
Only to the extent taxpayer benefitted from a deduction in the year of the refund
Use Worksheet II to calculate taxable amount
Do not include refundable federal credits (e.g. EITC, additional child credit)


Subtractions from Federal AGI







Exempt interest from federal bonds, notes and obligations {15-30-2110(2)(a), MCA; ARM
42.15.216 (also federal laws)}
Must be from a debt instrument issued by the federal government
Exempt tribal income {ARM 42.15.220}
Administrative rule specifically addresses wages earned by an enrolled tribal member living and
working on their reservation
o Also addresses income derived from lands held in trust (e.g. royalties)
Treatment prescribed in rule is currently applied to all other sources of income such as
retirement, interest and business income
State income tax refunds {15-30-2110(2)(d), MCA}
Only if included in federal adjusted gross income
Partial pension and annuity income exclusion {15-30-2110(2)(c), MCA; ARM 42.15.219}
Exclude up to $3,980 of taxpayer’s distribution
o Compute allowable amount separately on a joint return
Exclusion amount begins to phase out when federal AGI exceeds $33,190
o Lose $2 of exclusion for every $1 over $33,190
Amounts subject to federal 5% or 10% early distribution penalty are not eligible as well as any
distribution considered “early” under the federal rules
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2015 Montana Individual Income Tax
Examples:
1. Aedan is single and his federal adjusted gross income (AGI) is $31,050 including $4,100 in
qualifying pension income. Aedan can exclude $3,980 of the pension income to compute
Montana adjusted gross income.
2. Aedan’s qualifying pension income is $4,100 as example 1 except his federal AGI is $34,000.
Aedan’s exclusion amount is reduced by $1,620 to $2,480 as computed below:
$34,000 minus $33,190 = $810 times 2 = $1,620 reduction
3. Aedan and Caitlin are married and filed a joint federal return reporting an AGI of $51,050
consisting of $34,000 for Aedan and $17,050 for Caitlin. Aedan has qualifying pension income of
$4,100.
a. If Aedan and Caitlin file a joint Montana return, they cannot exclude any of Aedan’s
pension income.
b. If Aedan and Caitlin file separate Montana returns, Aedan can exclude $2,480 of his
pension as example 2.
4. Assume the same facts as example 3 except that Caitlin’s income includes $2,800 in qualifying
income. If they file separately, Caitlin can exclude all her pension income.
5. Patrick and Shannon are married and filed a joint federal return reporting an AGI of $31,000
including qualifying income of $4,500 for Patrick and $2,200 for Shannon. Because the exclusion
applies to each taxpayer separately regardless of filing status, the most the couple can exclude
is $6,180 ($3,980 for Patrick plus $2,200 for Shannon) even if they file jointly.
Partial interest exclusion for taxpayers 65 and older {15-30-2110(2)(b), MCA; ARM 42.15.215}
Up to $800 if filing as single, head of household or separately or $1,600 if filing jointly
Interest income must be included in Montana AGI
Examples:
1. William, 65, and Margaret, 57, have $2,000 in total Montana taxable interest income. William
has $750, Margaret has $600 and the remaining $650 is from a joint account
a. If William and Margaret file a joint return, they can exclude $1,600 since only one
spouse needs to be 65 or older.
b. If William and Margaret file separately, William will report $1,075 (his $750 plus $325
from the joint account) but he can only exclude $800. Margaret is not entitled to
exclude any interest income because she does not meet the age requirement.
2. Graeme, 89, has $2,700 in federally taxable interest from federal obligations which is exempt
from Montana tax. Graeme is not entitled to any exclusion since there is no interest in his
Montana AGI.
3. Leah, 76, has $1,200 in interest from Ohio municipal bonds which are federally exempt but are
added when computing Montana AGI. Leah may claim an exclusion of $800 because the
interest is added when computing Montana AGI.



Exemption for tips and gratuities {15-30-2110(2)(f), MCA}
Only applies to tips, gratuities and service charges received by the taxpayer “for services
rendered to patrons of premises licensed to provide food, beverage or lodging”
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2015 Montana Individual Income Tax





Exempt Medical Care Savings Account deposits {15-30-2110(2)(j) & 15-61-202, MCA; ARM
42.15.602}
Up to $3,000 of deposits and all the taxable earnings
o No cap on the total that can be deposited in a year or the balance of the account
o Excess deposits can be carried over and deducted in subsequent years (up to $3,000
total including deposits made that year)
Withdrawals must be to pay or reimburse eligible medical expenses paid during the year for the
taxpayer, their spouse and their dependents (as defined in Montana law and rules)
Joint accounts are not allowed
Nonqualified withdrawals added back to Montana AGI and subject to a 10% penalty
o Withdrawals made on the last business day of the year are not subject to the 10%
penalty but are still added back to income
Subtraction for federally taxable Tier II Railroad Retirement {ARM 42.15.222}
Not taxable per federal law
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2015 Montana Individual Income Tax
Deductions (Standard or Itemized)


Standard Deduction
Single or Married Filing Separately
Minimum $1,940 – Maximum $4,370
Jointly or Head of Household
Minimum $3,880 – Maximum $8,740
OR


Itemized Deductions
o Starts with all deductions allowable under federal law (I.R.C. 161) but some differences
o Use Montana AGI for any limitations, floors, “haircuts”, etc.
Not allowed for Montana:
o State income tax paid
Allowed (not allowed federally or the Montana treatment deviates from federal):
o 100% of medical insurance premiums – including Medicare B premiums but not
Medicare A premiums (deductible federally but subject to 7.5%/10% threshold)
o 100% of long term care insurance premiums (deductible federally but subject to
7.5%/10% threshold)
o Federal income tax paid
 STUDENT NOTE: The deduction for federal income tax is limited to $5,000 for
single, married filing separately or head of household or $10,000 if filing jointly
o Light vehicle registration fee
o Child care expenses (Montana Form 2441M)
o Certain political contributions
Form 2, line 42– Deductions: Mark box to the left of “Itemized Deductions” if you are itemizing
deductions. (If you do not check this box, the return will be defaulted to the standard
deduction.)
ITEMIZED DEDUCTIONS-Married filing separately
 Both spouses have to either claim the standard deduction or itemize their deductions. They
cannot use different methods even when filing on separate forms.



How do we allocate our deductions between both spouses?
You need to use both columns A and B on Form 2, Schedule III
When you are filing separately, deductions that are paid from a joint account can be claimed
100% by either spouse or split between both spouses.
o For example: If you paid your home mortgage from a joint checking account you can
split this deduction between the spouses or apply 100% of the deduction to only one
Your federal income tax paid with joint funds is pro-rated based on each spouse’s income. The
federal income tax withheld and reported on Form W-2 or 1099 has to be claimed by the
spouse who paid it.
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2015 Montana Individual Income Tax
Example Rory D. Fogharty
Cara B. Fogharty
PO Box 1690
1603 Nels Ln
Libby, MT 59923
Income:
SSN: 000-00-2121
SSN: 000-00-3434
Rory:
Interest Income
$500
(Includes $100 in savings bonds)
Pension Income
$8,600
State Refund
$100
Social Security
$5,000
Both:
Interest Income
Ordinary Dividends
Age: Both over age 65
Cara:
Wage
Pension Income
State Refund
$13,000
$3,000
$200
$1,200
$1,200
Itemized deductions:
Medicare insurance premiums
Federal withholding – Cara’s W-2
Federal withholding – Rory’s pension
Real estate taxes paid from a joint account
Light vehicle registration fee paid from a joint account
Home mortgage interest paid from a joint account
Charitable contributions paid by a joint account
$525
$900
$400
$2,100
$615
$1,500
$750
Deductions that can only be claimed by one spouse
 The Medicare insurance premiums can only be claimed by Rory because they are withheld from
his social security and for his coverage.
 Federal income tax withheld can only be claimed by the individual who the amount was
withheld from regardless of the reason.
Each spouse is equally entitled to the remaining deductions so they may be allocated in
whatever manner is most beneficial to the couple. When allocating itemized deductions, you
should consider other factors that affect each spouse’s taxable income such as personal
exemptions and other exclusions and subtractions. In this example, Rory and Cara will be able
to take advantage of the partial pension and interest exclusions but Cara has wages that don’t
enjoy any special exclusion or subtraction. Because of this, any itemized deductions that can be
allocated should be given to Cara. Rory will only have itemized deductions totaling $925 (which
is less than the minimum standard deduction of $1,940) but most of his income has been
reduced through other provisions. Cara will have the remaining itemized deductions totaling
$5,865 which helps reduce her taxable income.
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2015 Montana Individual Income Tax
Tax, Payments and Offsets
Tax Table
2015 Tax Brackets and Table
If your taxable income on Form 2, line 45 or Form 2EZ, line 14 is:
more than
but not more than
Then your tax is
0
2,800
5,000
7,600
10,300
13,300
17,100



2,800
5,000
7,600
10,300
13,300
17,100
1% of your taxable income
2% of your taxable income
3% of your taxable income
4% of your taxable income
5% of your taxable income
6% of your taxable income
6.9% of your taxable income
Less:
(28)
(78)
(154)
(257)
(390)
(544)
Calculate the taxpayer’s tax using the tax table above. This calculation may not necessarily
be the taxpayer’s tax liability.
A taxpayer who has a reported net capital gain is entitled to a 2% capital gains credit that is
applied directly against the taxpayer’s tax liability that is calculated using the table above.
(Form 2, line 47)
o When using Form 2, calculate the 2% capital gains tax credit using the following
formula:
 Add any capital gains included on Form 2, Schedule II, lines 2, 5, 25 and 28
 Subtract the result from the amount on Form 2, line 13
 Multiply that result by .02 (2%)
Form 2, Line 48– Resident tax after capital gains credit

Nonrefundable Credits
Review Montana Form 2, Schedule V for a listing of all Montana nonrefundable tax credits.

Recapture Taxes
Family education savings account recapture tax; endowment credit recapture tax; and the rural
physician’s credit recapture tax
= Montana total tax due before payments and offsets
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2015 Montana Individual Income Tax
Tax, Payments and Offsets




Payments and offsets
Montana withholding from W-2s, 1099s or K-1s
Estimated tax payments
Extension payments
Refundable credits
o STUDENT NOTE: The Form 2 does not specifically identify the Elderly
Homeowner/Renter credit on the main part of the form. You can find the Elderly
Homeowner/Renter credit on Form 2, Schedule V, line 25.

Penalties and Interest
Interest on underpayment of estimated taxes may be owed if tax due after withholding and
credits for the current tax year is $500 or more
Late file penalty-lesser of $50 or tax due (after withholding, credits and estimated payments)
o Six-month extension to file allowed if the taxpayer has paid at least 100% of the
prior year’s tax or 90% of the current year’s tax by April 15th
o Married filing separately (even on the same form) is two returns so both may be
charged a penalty
Late payment penalty-1.2% per month (or part of a month) 12% maximum
o Penalty may be waived if tax and interest are paid in full when the return is filed
Interest-8% per year computed daily



Other Penalties (Form 2, line 68)
10% penalty for nonqualified withdrawal from a MT Medical Care Savings account
10% penalty for nonqualified withdrawal from a MT First-time Home Buyer Savings account
10% penalty for nonqualified distributions from a Farm and Ranch Risk Management account




Check-offs
Nongame Wildlife Program
Child Abuse Prevention
Agriculture Literacy in Montana Schools
Montana Military Family Relief Fund

Amount that you owe
We encourage the use of direct debit to pay electronically filed returns.
o “There’s an app for that” (Income Tax Express)




Your refund
We encourage the direct deposit of refunds as it is faster and more secure. Generally, direct
deposit refunds generated by an electronically filed return are deposited into the taxpayer’s
account within 5 to 7 working days.
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2015 Montana Individual Income Tax
ELDERLY HOMEOWNER/RENTER CREDIT – FORM 2EC
A credit for property tax billed and/or rent paid – property tax relief
NAME(S), ADDRESS, SOCIAL SECURITY NUMBER, DATE OF DEATH
POINTS TO REMEMBER

NAME & ADDRESS: Complete both the primary and secondary spouses’ names as they appear on
their Montana Form 2, even if only one spouse is over the age of 62.

Include both spouses’ social security numbers

If one spouse has died in 2015, include his or her date of death. If the qualifying spouse who is age
62 or older dies before October 1, 2015, they do not qualify for the elderly homeowner/renter
credit.

If one spouse has died in 2015 and both spouses were age 62 or older, the surviving spouse is
entitled to the elderly homeowner/renter credit.

If filing a claim for a deceased person who was single or a couple where both passed during the
year, a completed federal form 1310 needs to be included.

If spouses live apart (e.g. one in a nursing home and one in family home), they are still considered
one household and only one claim is allowed.
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2015 Montana Individual Income Tax
Part I: Qualifications
POINTS TO REMEMBER

Age Requirement: Again, both spouses do not have to be age 62 or older to claim this credit; only
one spouse needs to meet the age requirement.
o Some mistakenly believe that a disabled individual under the age of 62 qualifies for the
credit

Individuals who are considered “snowbirds” and head south for the winter still meet the 9-month
residency test as long as they maintain their home and their status as a Montana resident.

If a taxpayer dies before October 1, 2015, they no longer meet the 9-month residency test and do
not qualify for this credit. If the deceased individual was married and the other spouse meets all
the qualifications for this credit, the surviving spouse can claim the credit.

Occupancy does not necessarily mean a person has to stay full-time in the dwelling. He or she can
visit outside Montana for part of the year as long as he or she maintains the dwelling(s) as their
principal residence for a total of 6 months.

“Gross household income” is defined as ALL income received by ALL individuals of a household
while they are members of that household

What is a household? It is an association of persons who live in the same dwelling, share the
facilities, accommodations and expenses. Administrative rule states that a married couple living
apart where one is in a facility are a single “household” and can only claim the credit based on one
location.
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2015 Montana Individual Income Tax
PART II – HOUSEHOLD INCOME
POINTS TO REMEMBER





Gross household income means federal adjusted gross income, adjusted for:
o Capital gains excluded from AGI (e.g. gain on sale of residence)
o All interest on federal, state, county and municipal bonds
o Alimony, support money, nontaxable strike benefits, cash public assistance, unemployment,
state income tax refunds including any 2EC refunds, Montana taxable portion of federal tax
refunds (i.e. any other income received in the household)
o All social security payments received, except for those paid directly to
a nursing home, any and all pensions, such as Railroad Retirement, Veteran’s Disability,
traditional and Roth IRA distributions, etc.
Gross household income is reduced by the taxpayer’s basis
o Reduce any retirement income, insurance benefits, etc, by the taxpayer’s basis (his or her
contribution) in the income if not already subtracted to determine the taxable amount
Gross household income does not include losses
o Do not combine capital gains and losses from Schedule D. Combine the gains and disregard the
losses.
o Do not include any losses from a business (Schedule C), partnership, rental properties, royalties,
etc (Schedule E) or farming activity (Schedule F)
If gross household income (line 1) is greater than $ 45,000
 STOP – THE 2EC CREDIT IS NOT AVAILABLE TO YOU
Household income limitations:
o Use the appropriate percentage if your household income (line 3) is $35,000 or greater
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2015 Montana Individual Income Tax
PART III – CREDIT COMPUTATION
POINTS TO REMEMBER
Line 6: Property Tax Billed



Includes the total property tax billed, or levied, against the taxpayer in 2015 for the residence and
up to 1 acre of surrounding land considered part of the property. This includes all special
assessments and fees.
It is based on the November 2015 property tax statement. It is not based on the property taxes
you actually paid in 2015.
If filing on paper, attach a copy of the property tax statement or a letter from the County Treasurer
verifying the amount of property tax billed. If you are filing electronically, do not send in the
property tax statement or letter at the same time. Retain it and provide it to the department upon
request.
Line 7: Rent Equivalent Tax Paid



Rent is the amount that you paid in 2015 for the right to occupy your residence. It does not include
amounts that pay for amenities such as meals, housekeeping or nursing care.
Only rent paid to a facility subject to property tax or rent for a dwelling rented from a county or
municipal housing authority qualifies for the credit. Verify that the facility pays property taxes and
not just assessments such as sewer, water and garbage.
If filing on paper, attach a copy of your cancelled rent checks or signed rent receipts to your Form
2EC. If you are filing electronically, do not send these copies. Retain them with your records and
provide them to the department if requested.
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2015 Montana Individual Income Tax
COMPREHENSIVE PROBLEM
In this section you will complete a tax return similar to what you may encounter at a volunteer
assistance site. This will be a valuable practice as you prepare to help taxpayers.
COMPREHENSIVE PROBLEM
Seamus and Sarah Kavanagh are both over age 65 and are full year Montana residents. Seamus’s social
security number is 000-00-5555 and Sarah’s social security number is 000-00-6666. They live at 230
Vista View Road, Great Falls, MT 59401.
Income
Wages………………………………………………………………………...
Interest (Bank)…………………………………………………………...
Includes $ 200 of U.S. Savings Bond Interest
Ordinary Dividends……………………………………………………..
Pension (All taxable)……………………………………………………
Social Security……………………………………………………………..
2014 state refund received in 2015…………………………….
2014 federal refund received in 2015…………………………
2014 2EC reported in 2015………….………………………………
Expenses
Medical expenses paid in 2015……………………………………
$ 1,000 of expenses is for medical premiums
Federal withholding……………………………………………………..
Federal estimated tax payments…………………….……………
State withholding…………………………………………………………
State estimated tax payments………………………………..……
Real estate taxes…………...……………………………………………
Motor vehicle taxes…………………………………………………….
Motor vehicle registration fee…………………………………….
Contributions ………………………….…………………………………
Jointly
Seamus
$ 2,000
Sarah
$ 13,000
$ 12,000
$ 3,000
$ 6,000
$ 100
$ 400
$ 50
$ 200
$ 1,000
$ 4,000
$ 200
$ 400
$ 800
$ 200
$ 3,000
$ 3,000
$ 650
$ 165
$ 2,000
The November 2015 property tax statement shows property tax billed in the amount of $ 3,500.
Mr. and Mrs. Kavanagh itemized deductions on both their federal and state tax returns for 2014.
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$ 400
2015 Montana Individual Income Tax
IMPORTANT POINTS TO REMEMBER
 Marking “Yes” in response to “Do you want to allow another person (such as a paid preparer) to discuss
this return with us?” and entering an individual’s name and phone number in “Third Party Designee”
section allows the department to discuss basic processing of the return with another person.
 Married couples can still file their Montana returns using a “married filing separately” status even if
they filed jointly on their federal return.
 Use columns A and B when using filing status “3a” – Married filing separately on the same form.
 Each spouse will have to report their own income in their column.
 Accounts held jointly between both spouses have to be split 50% to Spouse A and 50% to Spouse B.
 Montana’s tax rates are progressive. (From 1% to 6.9%). A spouse’s income may be subject to a
higher tax rate if the couple files jointly rather than separately.
 Always check out both statuses before filing to determine which is more beneficial for the
taxpayers.
 When filing separately on the same form, or on separate forms, both spouses have to elect the
same method for their deductions. In other words, both spouses have to itemize deductions or
both have to claim the standard deduction.
 Generally, a quick way to determine if it is beneficial to file separately is to see if the spouses each
have income more than the maximum standard deduction of $4,370 and the personal exemption of
$2,330 (adjusted for additional exemption amount each spouse is entitled to).
 An individual is always entitled to their personal exemption even if they are claimed as a dependent on
another return.
 When preparing to submit the return, make sure all applicable schedules are included (worksheets are
not required but can be submitted with the return).
 If the return cannot be submitted by the original due date, make sure that at least 100% of the prior
year’s tax or 90% of the current year’s tax is paid through withholding and payments by April 15, 2015 in
order to avoid a late filing penalty. An extension to file is also allowed if the actual tax liability (line 53
on Form 2) for the tax year is $200 or less.
 Elderly Homeowner/Renter Credit is basically property tax relief based on need in the form of a tax
credit.
 Only one member of the household needs to be 62 or older.
 Rent is the amount paid for the right to occupy the space and does not include amenities.
 Income includes nontaxable items as well as taxable.
 Income from everyone who makes up the household needs to be considered.
 Form 2EC should only be submitted by itself (“stand-alone”) if a Montana return is not required.
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DEPARTMENT SERVICES AND ADDRESSES
Customer Service Center
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Toll Free 866-859-2254
Helena Area 406-444-6900
For the Hearing Impaired 406-444-2830
Internet: revenue.mt.gov
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Taxpayer Access Point (TAP)
 File Montana Forms 2, 2EZ and 2EC for free
 Payments
 “Where’s My Refund”
Download printable forms
Link to joint federal/state electronic filing of returns
Access Montana Code Annotated and Administrative Rules of Montana
Review individual income tax incentives
Current information
MAIL RETURNS WITH A PAYMENT TO:
Department of Revenue
P.O. Box 6308
Helena, MT 59604-6308
MAIL RETURNS WITHOUT PAYMENTS, INCLUDING REFUNDS TO:
Department of Revenue
P.O. Box 6577
Helena, MT 59604-6577
CONTACTS
Brian Olsen- Manager, Field Audit Unit
[email protected]
(406)444-2994
Brenda Price-Manager, Taxpayer Accounting Unit
[email protected]
(406)444-0501
Justin Ahlers-Specialist
[email protected]
(406)444-3363
Tim Wilson-eServices Unit Manager
[email protected] and [email protected]
(406)444-9351
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