Montana
MT · state · 18 cited facts
| Category | Provision | Value | Source |
|---|---|---|---|
| trust-nexus | Incomplete-gift nongrantor trust / ING (income tax reach) | REACHED: ARM 42.30.101's sufficient-connection factors expressly include the settlor's domicile AND the beneficiaries' domicile, and an ING settlor is both (they funded it and stay a permissible discretionary distributee). Its own examples reach any irrevocable trust created by a Montana resident with at least one Montana income beneficiary, which is the structure exactly. Kaestner bars beneficiary residence ALONE, but Montana is not relying on that alone | sources (2)Mont. Admin. R. 42.30.101 (resident trust: sufficient connection); MCA 15-30-2101 · medium confidence · as of 2026-07-13 · TY 2026 Montana trust residency is an open-ended sufficient-connection test with no ING-specific rule Resident trust means any trust that establishes a sufficient connection to Montana. Note: The rule's nonexclusive factors include the settlor's domicile and the beneficiaries' domicile, and an ING settlor is BOTH: they created the trust and they remain a permissible discretionary distributee (that retained access is what makes the gift incomplete). Its examples of a resident trust reach 'any irrevocable trust created by, or consisting of property of, a Montana resident ... [with] at least one income beneficiary who ... is a Montana resident', which describes the structure exactly. Kaestner (2019) holds that an in-state DISCRETIONARY beneficiary who receives nothing and cannot compel a distribution is insufficient ALONE, but Montana is not relying on beneficiary residence alone: it also has the resident settlor who funded the trust. REACHED, not gray (re-verified 2026-07-13 against the live rule and the Department's own filing-requirements page). The two-factor combination is what separates this from Kaestner; promote to an escape only on a Montana ruling or decision squarely on point. https://rules.mt.gov/gateway/RuleNo.asp?RN=42.30.101Montana Department of Revenue, Estate and Trust Income Tax Filing Requirements · medium confidence · as of 2026-07-13 · TY 2026 Montana DOR: trust residency turns on the creator's residence among other factors, and a resident trust is taxed on all income Where the trust's creator lives, Where the trust's property is located, Where the trustee lives, and Where the trust is administered. Note: The Department leads its own residency factor list with WHERE THE TRUST'S CREATOR LIVES, and its examples of a resident trust include 'Any irrevocable trust with at least one beneficiary in Montana' created by, or comprising property of, a Montana resident. A nonresident trust by contrast is taxed only on the Montana-source percentage of its income. So the Department is on record treating settlor domicile plus an in-state beneficiary as residency, which is the ING fact pattern. Medium: this is guidance restating ARM 42.30.101, not a ruling on an ING. https://revenue.mt.gov/taxes/fiduciaries/estate-and-trust-filing-requirements |
| estate-none | Estate and inheritance tax | None | sources (1)Montana Department of Revenue, Montana Estate and Inheritance Tax · high confidence · as of 2026-07-02 · TY 2025 Montana inheritance tax repealed Nov 2000; no estate tax for deaths after 2004 Montana's inheritance tax was repealed in November 2000 and does not apply to any death after January 1, 2001. Montana does not have an estate tax for deaths after 2004. Note: Two verbatim sentences; may not be adjacent in layout. Page does not name Initiative I-115, so that attribution stays unverified from this source. https://revenue.mt.gov/taxes/fiduciaries/estate-and-inheritance-tax |
| rate | Top income tax rate ordinary income (through TY2025) | 4.7% to $42,200 MFJ, then 5.9% above (2025 thresholds) | sources (1)MCA 15-30-2103 (rates); Montana Department of Revenue, 2025 Tax Tables and Deductions · medium confidence · as of 2026-07-02 · TY 2025 Montana taxes net long-term capital gains at 3.0%/4.1%, stacked after ordinary income 2025 Net Long-Term Capital Gains Tax Rates ; Single and Married Filing Separately... First $21,100 of capital gains minus Montana Ordinary Income 3.0% Net long-term capital gains exceeding $21,100 minus Montana Ordinary Income 4.1% Montana Ordinary Income exceeds $21,100 4.1% Note: The statutory home of the rate schedules is MCA 15-30-2103 (the citation id's 15-30-2120 label is a misnomer; the id is immutable, the authority field controls). Montana taxes net long-term capital gains at a reduced rate: 3 percent on net long-term capital gains not exceeding the 5.9 percent ordinary income bracket threshold, and 4.1 percent on net long-term capital gains exceeding that threshold. MFJ 2025 thresholds: 4.7%/3.0% bracket up to $42,200; 5.9%/4.1% above. The NLTCG schedule stacks after ordinary income fills the lower bracket first, so actual effective NLTCG rate depends on the mix of ordinary vs. capital income. Thresholds change in 2026/2027 per HB 337. Montana conforms to IRC §1222 netting and federal carryforward. The harvest-rule choice ties for an all-LT estimand. https://revenue.mt.gov/taxes/tax-tables-and-deductions/2025 |
| rate | Top income tax rate ordinary income (TY2026, HB 337) | 4.7% to $95,000 MFJ / $47,500 single, then 5.65% above (HB 337, Ch. 227, L. 2025); falls to 5.4% TY2027 | sources (1)Montana Department of Revenue, 2026 Withholding Updates (HB 337, Ch. 227, L. 2025); MCA 15-30-2103 · medium confidence · as of 2026-07-03 · TY 2026 Montana TY2026: top ordinary rate 5.65%; 4.7% bracket widened to $95,000 MFJ / $47,500 single the highest marginal tax rate will decrease from 5.9% to 5.65%, and the 4.7% lower rate will apply to income up to $95,000 for joint filers, $71,250 for Head of Household, and $47,500 for all other statuses Note: Effective January 1, 2026 per the DOR page. HB 337 drops the top rate again to 5.4% for TY2027. The net-long-term-capital-gains rates stay 3.0%/4.1% for 2026-2027 (DOR: 'The rates on long-term capital gains remain at 3.0% and 4.1%'); only their thresholds track the widened ordinary brackets. https://revenue.mt.gov/news/recent-news/2026-withholding-updates |
| character | Net long-term capital gains (NLTCG) rate | 3.0% (lower bracket) / 4.1% (upper bracket), stacked after ordinary income fills brackets | sources (1)MCA 15-30-2103 (rates); Montana Department of Revenue, 2025 Tax Tables and Deductions · medium confidence · as of 2026-07-02 · TY 2025 Montana taxes net long-term capital gains at 3.0%/4.1%, stacked after ordinary income 2025 Net Long-Term Capital Gains Tax Rates ; Single and Married Filing Separately... First $21,100 of capital gains minus Montana Ordinary Income 3.0% Net long-term capital gains exceeding $21,100 minus Montana Ordinary Income 4.1% Montana Ordinary Income exceeds $21,100 4.1% Note: The statutory home of the rate schedules is MCA 15-30-2103 (the citation id's 15-30-2120 label is a misnomer; the id is immutable, the authority field controls). Montana taxes net long-term capital gains at a reduced rate: 3 percent on net long-term capital gains not exceeding the 5.9 percent ordinary income bracket threshold, and 4.1 percent on net long-term capital gains exceeding that threshold. MFJ 2025 thresholds: 4.7%/3.0% bracket up to $42,200; 5.9%/4.1% above. The NLTCG schedule stacks after ordinary income fills the lower bracket first, so actual effective NLTCG rate depends on the mix of ordinary vs. capital income. Thresholds change in 2026/2027 per HB 337. Montana conforms to IRC §1222 netting and federal carryforward. The harvest-rule choice ties for an all-LT estimand. https://revenue.mt.gov/taxes/tax-tables-and-deductions/2025 |
| conformity | Loss carryforward | Conforms to IRC §1212 indefinite federal carryforward applies; rule ties for all-LT gain | sources (1)IRC §1212(b) · high confidence · as of 2026-06-21 · TY 2025 IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year. Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged. https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section1212&num=0&edition=prelim |
| muni-instate | In-state muni bond interest | Exempt: MCA §15-30-2110 exempts interest on Montana state and local obligations from Montana income | sources (1)MCA §15-30-2110 · medium confidence · as of 2026-06-18 · TY 2025 MT taxes out-of-state muni bond interest; MT bonds exempt MCA §15-30-2110 Interest and mutual fund dividends from state, county, or municipal bonds from other states. Enter the total amount of tax-exempt interest income you received from bonds of other states or local governments. Note: MCA §15-30-2110; confirmed in 2024 Montana Form 2 Instructions. https://revenuefiles.mt.gov/files/Forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2024_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf |
| muni-outstate | Out-of-state muni bond interest | Taxable: MCA §15-30-2110: out-of-state muni bond interest added to Montana income (Form 2 Instructions) | sources (1)MCA §15-30-2110 · medium confidence · as of 2026-06-18 · TY 2025 MT taxes out-of-state muni bond interest; MT bonds exempt MCA §15-30-2110 Interest and mutual fund dividends from state, county, or municipal bonds from other states. Enter the total amount of tax-exempt interest income you received from bonds of other states or local governments. Note: MCA §15-30-2110; confirmed in 2024 Montana Form 2 Instructions. https://revenuefiles.mt.gov/files/Forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2024_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf |
| qoz-conformity | QOZ conformity (IRC §1400Z-2) | Conforms to IRC §1400Z-2 QOZ gain deferral and 10-year exclusion via HB 458 (2019) explicit conformity | sources (1)MCA 15-30-2120 · high confidence · as of 2026-07-02 · TY 2025 Montana conforms to IRC §1400Z-2 QOZ gain deferral and exclusion (1) The items in subsection (2) are added to and the items in subsection (3) are subtracted from federal taxable income to determine Montana taxable income. Note: MCA 15-30-2120 starts from federal taxable income and lists no §1400Z-2 addback in subsection (2), so the federal QOZ deferral and exclusion flow into the Montana base. https://mca.legmt.gov/bills/mca/title_0150/chapter_0300/part_0210/section_0200/0150-0300-0210-0200.html |
| qsbs-conformity | QSBS conformity (IRC §1202) | Conforms to IRC §1202 QSBS gain exclusion via rolling IRC conformity under MCA 15-30-2120; potential ambiguity from Mont. Admin. R. 42.15.318(1)(c) NOL recomputation add-back context | sources (1)MCA 15-30-2120 · high confidence · as of 2026-07-02 · TY 2025 Montana conforms to IRC §1202 QSBS gain exclusion via rolling IRC conformity (1) The items in subsection (2) are added to and the items in subsection (3) are subtracted from federal taxable income to determine Montana taxable income. Note: MCA 15-30-2120 starts from federal taxable income and lists no §1202 addback in subsection (2), so federally excluded QSBS gain never enters the Montana base. Mont. Admin. R. 42.15.318(1)(c) references a QSBS add-back in the context of NOL recomputation, which creates potential ambiguity, but general conformity to §1202 is the baseline position under MCA 15-30-2120. https://mca.legmt.gov/bills/mca/title_0150/chapter_0300/part_0210/section_0200/0150-0300-0210-0200.html |
| agency-obligations | FNMA/FHLMC bond interest | Taxable: MCA §15-30-2131 subtraction requires interest be 'exempt from state income taxes under the laws of the United States'; FNMA/FHLMC have no federal bondholder exemption statute | sources (1)MCA §15-30-2131 · medium confidence · as of 2026-06-20 · TY 2025 Montana subtraction for U.S. obligation interest requires exemption from state income taxation under federal law; FNMA and FHLMC have no such federal bondholder exemption There is allowed as a deduction from adjusted gross income: interest received on United States government obligations to the extent included in gross income for federal income tax purposes if the income is exempt from state income taxes under the laws of the United States. Note: MCA §15-30-2131 requires the income be 'exempt from state income taxes under the laws of the United States.' FNMA (12 U.S.C. §§1719(e), 1723a(c)) and FHLMC (12 U.S.C. §1455(a)) have no bondholder exemption statute. No Montana DOR named-entity publication found; confidence: medium. https://mca.legmt.gov/bills/mca/title_0150/chapter_0300/part_0210/section_0310/0150-0300-0210-0310.html |
| dividend-qualified | Qualified dividend rate (IRC §1(h)(11)) | Ordinary rate: Montana has no IRC §1(h)(11) preferential rate; qualified dividends taxed at ordinary rates (4.7% / 5.9%); the NLTCG preferential rate applies only to net long-term capital gains from asset sales | sources (1)MCA 15-30-2103 (rates); Montana Department of Revenue, 2025 Tax Tables and Deductions · medium confidence · as of 2026-07-02 · TY 2025 Montana taxes net long-term capital gains at 3.0%/4.1%, stacked after ordinary income 2025 Net Long-Term Capital Gains Tax Rates ; Single and Married Filing Separately... First $21,100 of capital gains minus Montana Ordinary Income 3.0% Net long-term capital gains exceeding $21,100 minus Montana Ordinary Income 4.1% Montana Ordinary Income exceeds $21,100 4.1% Note: The statutory home of the rate schedules is MCA 15-30-2103 (the citation id's 15-30-2120 label is a misnomer; the id is immutable, the authority field controls). Montana taxes net long-term capital gains at a reduced rate: 3 percent on net long-term capital gains not exceeding the 5.9 percent ordinary income bracket threshold, and 4.1 percent on net long-term capital gains exceeding that threshold. MFJ 2025 thresholds: 4.7%/3.0% bracket up to $42,200; 5.9%/4.1% above. The NLTCG schedule stacks after ordinary income fills the lower bracket first, so actual effective NLTCG rate depends on the mix of ordinary vs. capital income. Thresholds change in 2026/2027 per HB 337. Montana conforms to IRC §1222 netting and federal carryforward. The harvest-rule choice ties for an all-LT estimand. https://revenue.mt.gov/taxes/tax-tables-and-deductions/2025 |
| treasury | U.S. Treasury interest | Exempt: 31 U.S.C. §3124(a) prohibits state taxation of U.S. government obligations (T-bills, T-notes, T-bonds, TIPS, I-bonds) | sources (1)31 U.S.C. §3124(a) · high confidence · as of 2026-06-20 · TY 2025 U.S. Treasury interest exempt from Montana income tax: 31 U.S.C. §3124(a) prohibits state taxation of U.S. government obligations Stocks and obligations of the United States Government are exempt from taxation by a State or political subdivision of a State. The exemption applies to each form of taxation that would require the obligation, the interest on the obligation, or both, to be considered in computing a tax. Note: 31 U.S.C. §3124(a) preempts state income taxation of U.S. government obligations. Covers T-bills, T-notes, T-bonds, TIPS, and I-bonds. Most states allow a deduction or subtraction by statute cross-referencing this federal preemption. https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title31-section3124 |
| fhlb-ffcb | FHLB and FFCB bond interest | Exempt: 12 U.S.C. §1433 (Federal Home Loan Bank Act) and 12 U.S.C. §2023 (Farm Credit Act) mandate state tax exemption for FHLB and FFCB securities | sources (2)12 U.S.C. §1433 (Federal Home Loan Bank Act) · high confidence · as of 2026-06-20 · TY 2025 FHLB and FFCB bond interest exempt from Montana income tax: federal enabling statutes mandate state tax exemption Any security issued under this chapter by a Federal home loan bank, including the stock thereof, shall be exempt from taxation, except taxes upon real estate, by any State, county, municipality, or local taxing authority. Note: 12 U.S.C. §1433 (FHLB) and 12 U.S.C. §2023 (FFCB/Farm Credit Act) both mandate state tax exemption for securities issued under their chapters. Contrasts with FNMA (12 U.S.C. §§1719(e), 1723a(c)) and FHLMC (12 U.S.C. §1455(a)) which have no bondholder exemption statute and whose interest is taxable by income-tax states. https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1433&num=0&edition=prelim12 U.S.C. §2023 (Farm Credit Act) · high confidence · as of 2026-06-20 · TY 2025 Farm Credit Act: notes, bonds, debentures, and other obligations of Farm Credit Banks are instrumentalities of the United States exempt from all State, municipal, and local taxation The mortgages held by the Farm Credit Banks and the notes, bonds, debentures, and other obligations issued by the banks shall be considered and held to be instrumentalities of the United States and, as such, they and the income therefrom shall be exempt from all Federal, State, municipal, and local taxation, other than Federal income tax liability of the holder thereof under the Public Debt Act of 1941 (31 U.S.C. 3124). Note: 12 U.S.C. §2023 explicitly covers 'the income therefrom' (i.e., interest payments to bondholders), exempting it from all State and local taxation. The only carve-out is federal income tax on the holder. Parallel to 12 U.S.C. §1433 (FHLB Act), which exempts FHLB securities from state taxation. Together §1433 and §2023 mandate state and local tax exemption for both FHLB and FFCB bond interest. Shared across all jurisdictions: a single object reference satisfies buildCitationIndex() identity check. https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2023&num=0&edition=prelim |
| carryback | Capital loss carryback | None: IRC §1212(b) provides carryforward only for non-corporate taxpayers; no carryback to prior years | sources (1)IRC §1212(b) · high confidence · as of 2026-06-21 · TY 2025 IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year. Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged. https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section1212&num=0&edition=prelim |
| filing-status-doubled | MFJ brackets double Single brackets | Yes: Montana TY2025 two-bracket schedule sets MFJ/QSS threshold at $42,200 (exactly 2× the $21,100 Single/MFS threshold); same rates (4.7%/5.9%) at each doubled boundary (marriage neutral) | sources (1)Montana Department of Revenue, 2025 Tax Tables and Deductions · medium confidence · as of 2026-07-02 · TY 2025 Montana income tax TY2025: MFJ income threshold is exactly double Single/MFS threshold (marriage neutral) Married Filing Jointly and Qualifying Surviving Spouse... First $42,200 of Montana Ordinary Income 4.7% Montana Ordinary Income exceeding $42,200 5.9% Note: Montana TY2025 DOR tax tables: the MFJ ordinary-income threshold ($42,200) is exactly double the Single/MFS threshold ($21,100), so the schedule is marriage neutral. https://revenue.mt.gov/taxes/tax-tables-and-deductions/2025 |
| marital-udcprda | State adopted Uniform Disposition of Community Property Rights Act | Yes: Montana enacted the Uniform Disposition of Community Property Rights at Death Act (MCA 72-9-101 through Part 1 of Chapter 9, Title 72); recognizes community property character of assets from CP-state marriages | sources (1)MCA 72-9-101 · high confidence · as of 2026-06-22 · TY 2025 Montana Uniform Disposition of Community Property Rights at Death Act: short title 72-9-101. Short title. This part shall be known and may be cited as the 'Uniform Disposition of Community Property Rights at Death Act'. Note: Montana enacted the Uniform Disposition of Community Property Rights at Death Act (MCA Title 72, Chapter 9, Part 1). Montana is a common-law property state. The Act recognizes community property character of assets brought from community property states and governs their disposition at death. https://mca.legmt.gov/bills/mca/title_0720/chapter_0090/part_0010/section_0010/0720-0090-0010-0010.html |
| migration-loss-conformity | Migration loss carryforward conformity | Full conform (structural inference): Montana computes its income tax from the federal base, so an imported federal section 1212 capital-loss carryforward flows through to offset post-residency gains; no published guidance addresses the imported pre-residency carryforward. | sources (1)Mont. Code Ann. §15-30-2120 · medium confidence · as of 2026-07-03 · TY 2025 Montana conforms to the federal capital-loss base; treatment of an imported pre-residency section 1212 carryforward is a structural inference The items in subsection (2) are added to and the items in subsection (3) are subtracted from federal taxable income to determine Montana taxable income. Note: Mont. Code Ann. §15-30-2120 builds Montana taxable income by adding to and subtracting from federal taxable income, so the federal section 1212 capital-loss base carries through. No published guidance addresses the imported pre-residency carryforward; that piece stays a structural inference. https://mca.legmt.gov/bills/mca/title_0150/chapter_0300/part_0210/section_0200/0150-0300-0210-0200.html |