Budget & Taxes (Income Tax)

introduced · Montana · Legislature Dec 23, 2024

LC 2572: Exempt a portion of interest earnings from individual income tax

This bill modifies Montana's individual income tax calculation by exempting certain interest earnings from state taxation while requiring that such interest income still be reported on federal tax forms. The key provision creates a deduction for interest from U.S. government obligations and exempt-interest dividends, but limits the deduction amount based on the taxpayer's filing status. Additionally, the bill adjusts how various other income items are treated when calculating Montana taxable income, including provisions for pass-through entities, state tax deductions, and specific savings account withdrawals. The legislation applies to individual taxpayers filing Montana state income tax returns and includes a delayed effective date for implementation.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill provides tax relief by exempting certain interest earnings from state taxation, reducing individual tax burden and promoting fiscal responsibility.85% confidence

Sub-Topics Business Taxes Income Tax

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introduced · Montana · Legislature Jan 6, 2025

LC 940: Provide income tax benefit to support emergency response volunteers

This bill creates a Montana income tax deduction for volunteer firefighters and volunteer emergency care providers who serve as full-service volunteers. The key provision allows these individuals to subtract their volunteer service income from their Montana taxable income, with the deduction amount adjusted annually based on inflation. The legislation amends existing state tax code to establish this new benefit and includes a delayed effective date for implementation. This change directly affects volunteer emergency responders in Montana who currently pay taxes on income earned while serving without compensation.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill creates income tax deduction for volunteer emergency responders, providing tax relief and supporting public service volunteers90% confidence

Sub-Topics Income Tax

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introduced · Montana · Legislature Jan 15, 2025

LC 2287: Provide tax credit for volunteer first responders

This bill creates a Montana income tax credit for individuals who volunteer as emergency first responders, such as volunteer firefighters, emergency medical service members, and air search and rescue volunteers. The credit allows eligible taxpayers to receive up to $1,500, calculated at $15 per hour of active volunteer service, and is refundable, meaning it can be received even if the taxpayer owes no state income tax. To claim the credit, volunteers must submit proof of their service hours to the state tax department. Additionally, the bill adds this tax credit to a list of credits that the revenue interim committee must review every eight years to assess their effectiveness and impact on taxpayers.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill provides tax credit to volunteer first responders, offering financial relief and encouraging community service while maintaining fiscal responsibility through refundable credits.85% confidence

Sub-Topics Income Tax Tax Credits

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introduced · Montana · Legislature Jan 27, 2025

LC 1716: Revise income tax laws to lower income taxes

This bill revises Montana's income tax structure by raising the income thresholds at which higher tax rates apply and lowering the top tax rate. It directly affects all Montana taxpayers by increasing the amount of income taxed at the lower 4.7% rate and reducing the highest tax rate from 5.9% to 5.4% or 5.65% depending on filing status. The legislation also adjusts tax brackets for net long-term capital gains and includes provisions to automatically update tax brackets for inflation each year. These changes would apply to individual filers, heads of households, married individuals, estates, and trusts subject to Montana income tax.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill lowers income taxes and raises thresholds, providing tax relief to taxpayers and reducing tax burden on individuals.95% confidence

Sub-Topics Business Taxes Income Tax

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introduced · Montana · Legislature Jan 8, 2025

LC 1449: Provide for health care preceptor individual income tax credit

This bill creates a Montana income tax credit for unpaid health care preceptors who supervise students in eligible graduate-level health care training programs. The credit provides up to $1,000 per clinical rotation, with a maximum of $5,000 annually, but only applies to individuals who do not receive any compensation for their preceptor work. Eligible programs include those training nurses, doctors, pharmacists, therapists, and other health professionals, while preceptors must be licensed in Montana and volunteer their time. The bill also establishes administrative rules for verifying clinical hours and adds this new credit to a list of tax credits that must be reviewed by the revenue interim committee every eight years.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill creates tax credit for unpaid health care preceptors, providing financial relief to individuals and supporting health care education programs through tax incentives.85% confidence ✓ HealthcareSupports HealthcareBill provides tax credit to health care preceptors, supporting healthcare training programs and helping recruit unpaid supervisors for graduate health training.85% confidence

Sub-Topics Income Tax

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introduced · Montana · Legislature Feb 12, 2025

LC 447: Revise individual income tax rates and earned income credit

This bill revises Montana's individual income tax structure by lowering the top marginal tax rate from 5.9% to 4.9% for all filing categories, including married couples, heads of household, and single filers. It also reduces the tax rate on net long-term capital gains from 4.1% to 3.9% across all income brackets and filing statuses. The changes directly affect Montana taxpayers who file state income tax returns, with the new rates applying to taxable income exceeding specific thresholds that vary by filing status.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill lowers individual income tax rates and capital gains taxes, providing tax relief to Montana taxpayers and reducing overall tax burden.90% confidence

Sub-Topics Business Taxes Income Tax

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introduced · Montana · Legislature Jan 15, 2025

LC 53: Provide income tax deduction up to 150% for charitable donations

This bill amends Montana's income tax code to allow taxpayers to deduct charitable donations up to 150% of the amount they contribute, but only if they itemize deductions on their federal tax return. The provision adjusts how Montana taxable income is calculated by adding back certain federal deductions, including state income tax deductions, to ensure Montana residents pay state taxes on their full income rather than relying on federal tax benefits. It specifically affects Montana individual taxpayers who make charitable contributions and itemize deductions, providing a state-level incentive for philanthropy while maintaining alignment with federal tax rules. The bill also includes various other adjustments to federal taxable income for items like medical savings accounts, education savings, and military service income.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill provides tax deduction for charitable donations, promoting fiscal responsibility and supporting charitable contributions which often fund public services and community programs.85% confidence

Sub-Topics Income Tax

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introduced · Montana · Legislature Dec 23, 2024

LC 1627: Repeal state tax on social security income

This bill removes Montana state income tax on Social Security benefits for all taxpayers. It directly affects residents who receive Social Security income and currently pay state taxes on those payments. The legislation amends existing tax code sections to explicitly exempt Social Security benefits from state taxation. The bill includes technical updates to tax definitions and includes a delayed effective date for implementation.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill removes state income tax on Social Security benefits, providing tax relief to retirees and reducing tax burden on seniors.95% confidence

Sub-Topics Income Tax

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introduced · Montana · Legislature Mar 18, 2025

LC 4225: Increase IRC 529 education savings income tax deduction

This bill increases Montana's state income tax deduction for contributions to 529 family education savings accounts from $3,000 to $4,500 for the 2025 tax year. It allows taxpayers to reduce their taxable income by up to $4,500 for contributions made to accounts owned by themselves, their spouse, or their Montana-resident children or stepchildren. The bill also establishes an automatic inflation adjustment mechanism that will increase the deduction limit each year based on changes in the consumer price index, rounded to the nearest $100. Additionally, the changes apply retroactively to tax years beginning after December 31, 2024, and take effect immediately upon passage.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill increases state income tax deduction for 529 contributions, providing tax relief and encouraging education savings.90% confidence ✓ EducationSupports EducationBill increases tax deduction for 529 education savings accounts, expanding access to higher education funding and supporting families saving for college.85% confidence

Sub-Topics Income Tax

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introduced · Montana · Legislature Jan 15, 2025

LC 4308: Revise income tax brackets to lower income taxes

This Montana bill revises state income tax brackets to lower taxes by increasing the income thresholds at which higher tax rates apply. It directly affects all Montana taxpayers, including married couples, single filers, heads of households, and estates or trusts. The key change expands the income range taxed at the lower 4.7% rate while raising the threshold for the 5.9% rate, with similar adjustments made for net long-term capital gains. The bill also updates the inflation adjustment mechanism and applies changes retroactively to tax years beginning after December 31, 2024.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill lowers income taxes by increasing thresholds for higher tax rates, providing tax relief to Montana taxpayers across income levels.95% confidence

Sub-Topics Business Taxes Income Tax

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