Montana has made the following changes to the tax laws for the 2019 tax year:
Changes made to Form 2:
- Revisions relating to the Federal Form 1040 – Montana Form 2 was updated to reflect changes made to the 2019 Federal Form 1040.
- Payment schedule for married taxpayers filing separately on the same form - Married taxpayers filing separately on the same form, with one spouse owing while the other has an overpayment, must use Status 2a Payment Schedule on page 2 to determine whether they have a net amount owed or a net overpayment. If you are the spouse with the overpayment, you may be able to claim a partial refund after applying your overpayment to the amount owed by your spouse.
- Schedule 1 Additional Income and Adjustment to Income – Montana added a checkbox allowing you to indicate write-ins adjustments were included on line 22 of federal Schedule 1, page
- Montana Schedule K-1 – The Montana Schedule K-1 was revised to simplify reporting of Montana adjustments and the reporting of Montana source income by nonresidents.
Other changes for 2019:
- Earned Income Tax Credit – Beginning in tax year 2019 Montana has added a state version of the Earned Income Credit. The Montana EITC is offered at 3% of the federal credit and is fully refundable.
- Deposits to 529 Accounts - You can now direct part or all your overpayment to a Family Education Savings account (IRC 529) or an Achieve a Better Life Experience account (IRC 529A). Use the MT- 529 Schedule to indicate which account you want your overpayment to be deposited. This deposit is considered a refund to you and will be included on federal Form 1099-G.
- Allowable deductions for contributions to an ABLE account expanded - Beginning with Tax Year 2019, the following changes have been made regarding deductions for Achieving a Better Life Experience (ABLE) account contributions.
For you to claim the deduction, you must be:
- the designated beneficiary,
- the spouse of the designated beneficiary, or
- a parent, grandparent, sibling or child related to the designated beneficiary by blood, marriage, or legal adoption.
Contributions are eligible for deduction regardless of:
- the designated beneficiary’s residency, or
- the state in which the account is held or administered.
- Business deduction when a federal credit is claimed - Beginning with Tax Year 2019, businesses that claim a federal credit are allowed business expenses as a deduction for Montana tax purposes when this deduction is disallowed for federal tax purposes.