The following credits are currently supported for the Montana Tax Return. Please review the credit information to determine if you qualify for the credit.
Elderly Homeowner/Renter Credit
This is a property tax relief program that provides a refundable tax credit of up to $1,150. To qualify, the taxpayer must:
- be age 62 or older
- resided in Montana for more than 9 months during the tax year
- occupied or owned a home in Montana for a total of 6 months during the year
- gross income was less than $45,000 total for entire household
Adoption Credit (Line 27)
If you have a finalized adoption for the current tax year and were eligible to claim the federal adoption credit, you may qualify for a credit on the state return. The amount of the nonrefundable credit is $1,000 per child. If the credit amount exceeds your tax liability, you can choose to carry forward any unused credit for the next five years.
College Contribution Credit (Line 4)
You may claim a nonrefundable credit for contributions made to a foundation or general endowment fund of the Montana university system, or a private, community or tribal college of up to 10% of the contribution made with the maximum credit allowed being $500.
Elderly Care Credit (Line 9)
If you paid certain expenses in order to provide care to an elderly family member, you may be able to claim a nonrefundable credit. The credit cannot exceed $5,000 for one qualifying family member and $10,000 for 2 or more qualifying family members. A qualified family member(s) is one who is at least age 65, has been determined to be disabled by the SSA and has family income of $15,000 or less if single or $30,000 or less if married.
In addition, your Montana adjusted gross income must be less than $55,000 if your filing status is single or married filing jointly, or $27,500 if your filing status is married filing separately.
Unlocking Public Lands Credit (Line 5)
If you are a landowner and have entered into a contractual agreement with Montana Department of Fish, Wildlife and Parks which provides public access and recreation, you may receive a refundable annual tax credit of $750 per agreement, with the maximum credit amount allowed being $3,000 for the year.
Credit For Taxes Paid To Another State
This nonrefundable credit is available for Montana taxpayers filing as a full-year or part-year resident. This credit will be automatically calculated within your Montana full year Resident return if you have a Nonresident return for the other state created on your account. If you have Part-Year Montana return, you will need to manually enter the information asked within the Montana state program.
If you are a full-year resident and you paid income tax to another state or country on income that is also taxable to Montana, you may be entitled to a credit against your Montana income tax liability. If you claimed the foreign tax credit on your federal tax return, you can claim this credit for foreign taxes on your Montana tax return only if you have unused federal credit that is not eligible to be carried back or carried forward to another tax year. If you are a resident and have unused federal credit or paid tax to another state, please refer to Form 2, Schedule VI.
Wages for work performed in North Dakota – If you worked in North Dakota while a resident of Montana, the wages you receive for this work are not taxable by North Dakota under the income tax reciprocity agreement between the two states. If this applies to you, but your employer withheld North Dakota income tax from the wages, you should not take this credit. Instead, file a North Dakota individual income tax return to obtain a refund of the North Dakota income tax withheld. Review our Knowledgebase Article for complete filing instructions for the resident and nonresident returns.
If you are a part-year resident and you paid an income tax to another state or country on income that is also taxable to Montana and if you included it as Montana source income on Form 2, Schedule IV, lines 1 through 16, you may be entitled to a credit against your Montana part-year resident income tax liability for these income taxes paid to another state or country. If you claimed the foreign tax credit on your federal tax return, you can claim this credit for foreign taxes on your Montana tax return only if you have unused federal credit that is not eligible to be carried back or carried forward to another tax year. If you are a part-year resident and have unused federal credit or paid tax to another state, please refer to Form 2, Schedule VII.
Geothermal System Credit ENRGA (Line 17)
If you had a geothermal system installed in your principal home, you may claim a nonrefundable credit against your tax liability for the cost of purchasing and installation expenses. The amount of the credit cannot exceed $1,500 and must be applied in the year you installed your system. Any credit not used can be carry forward for 7 years. You cannot claim the Geothermal System Credit AND the Alternative Energy Systems Credit for the same investment.
Alternative Energy System Credit ENRGB (Lines 18 and 19)
Nonfossil form of energy: You can claim a credit against your tax liability for the cost of purchasing and installing a system that uses a recognized nonfossil form of energy such as: solar and wind energy or solid and organic waste. The total credit cannot exceed $500 per taxpayer. Any balance not used can be carried forward for 4 years. You cannot claim the Alternative Energy Systems Credit AND the Geothermal Energy Systems Credit in for the same investment.
Low emission wood or biomass combustion: You can claim a credit against your tax liability for the costs of purchasing and installing a system that uses a low emission or biomass combustion device such as a pellet or wood stove. You may also claim a credit for installing an outdoor hydronic heater or masonry heaters. The credit cannot exceed $500 per taxpayer and any credit not used can be carried forward for 4 years.
Energy Conservation Installation Credit ENRGC (Line 6)
You can claim a credit against your tax liability for energy conservation investments made to your home or other buildings. Your credit will be equal to 25% of your expenses for a maximum of up to $500. If you are married, your spouse may also qualify for a $500 credit as long as both of you made qualifying capital investments. You cannot qualify for this credit by just switching to a less expensive or free energy source.
Student Scholarship Credit (Line 12)
You can claim a credit against your tax liability for contributions you made to a student scholarship organization. This credit cannot exceed $150. If you are married, your spouse may receive a $150 credit. You are not allowed to take this credit if the contribution was already deducted for the same amount as a charitable contribution.
Innovative Educational Program Credit (Line 11)
You can claim a credit against your tax liability for the donations you made to an Innovation education program. The credit cannot exceed $150. If married, your spouse may receive a $150 credit. You are not allowed to take this credit if the contribution was already deducted for the same amount as a charitable contribution.
Qualified Endowment Credit (Line 5)
You have the ability to claim a credit toward you tax liability for contributions you made to a qualified Montana endowment held by a corporation in Montana or an entity that is tax exempt under USC 501(c) (3) or a trust or bank in Montana that is also tax-exempt. The credit is 40% of the present value of the planned gift made during the year.
Apprenticeship Credit (Line 13)
Available to Montana employers who are registered as a Montana Apprenticeship Program sponsor for any new position hired for on-the-job training. You must submit an application to the Department of Labor to be able to claim the credit. The credit must be claimed on the tax year in the year it is approved.
To enter these credits on your Montana return, follow the steps below:
- State Section
For more information regarding these Montana credits, please click here.