Montana Department of Revenue

Revised Montana NOL Schedule for Tax Years 2018-2020

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Revised Montana NOL Schedule for Tax Years 2018-2020

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Congress enacted the Federal Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, 2020. Among other things, the Act addresses net operating losses (NOLs) and other related provisions.

For example:

  • Section 2303 allows a five-year carryback for NOLs arising in the 2018, 2019, and 2020 tax years. Section 2303 also temporarily repeals the 80% of income limitation for tax years beginning before 2021.
  • Section 2304 temporarily repeals the loss limitation for individuals, estates and trusts under section 461(l) of the Internal Revenue Code (IRC) for tax years beginning before January 1, 2021.
  • Section 2306 amended section 163(j) of the IRC increasing the interest expense deduction for tax years 2019 and 2020.
  • Section 2307 made some technical amendments to section 168(e) of the IRC related to qualified improvement property.

The above-provisions apply when a taxpayer calculates Montana taxable income.  As a result:

  • Some taxpayers may have to amend their 2018 and/or 2019 tax returns;
  • Individuals, estates and trusts with an NOL incurred in tax years 2018 or 2019 may carry their NOL back five years and amend the corresponding returns filed in those years. A waiver of the carryback period will be available on their 2020 Montana income tax return for each impacted tax year.

As a result of the changes from the CARES Act to the treatment of NOLs for tax years 2018, 2019, and 2020, the department updated the Montana Net Operating Loss for Individuals, Estates and Trusts Schedule and it is now available to recalculate the NOL for 2018 and/or 2019 to carry back to previous years. Taxpayers will also use this schedule to calculate their 2020 NOL. Please note that a taxpayer cannot carry back a 2020 NOL before tax year 2020 has ended.  To carry back a 2020 NOL, you must complete your 2020 return and include the Class B NOL Schedule.

For Corporations, amended return instructions and NOL provisions remain unchanged. See the Corporate Income Tax Return Instructions for more information.

HELP Integrity Fee (HIF)

The Integrity fee is a monthly fee that certain participants of the Montana Health and Economic Livelihood Partnership (HELP) program must pay in addition to their premiums. If you are enrolled in the program, you are required to pay this fee if your equity in real property and/or improvements, or your equity in vehicles, or the taxable value of agricultural land you own, is above a certain limit. 

Complete the Asset Test

This asset test questionnaire is available at Integrityfee.mt.gov. If you would like a paper questionnaire, please call (406) 444-6900. 

If at least one of the three asset tests below show a result of more than zero, you are required to pay the integrity fee. 

The three tests are:  

  • Test 1: Your equity in the real property and improvements you own is more than $255,000: 
  • Test 2: You own more than one light vehicle, with a combined MSRP greater than $20,000, and your total equity in these vehicles is greater than $25,000; 
  • Test 3: The taxable value of agricultural land you own is more than $1,500. 

Calculation of the Fee

You do not need to calculate the Integrity Fee. Instead, the Department of Revenue will calculate the fee based upon the values reported in all three tests.  

The integrity fee is $100 a month, plus: 

  • $4 for every $1,000 above the thresholds in Test 1 and 2, plus 
  • $4 for every $100 above the threshold in Test 3. 

Changes to Assets/End of Coverage

If there are changes to your assets after you complete the tests, such as the sell of a home or car, please update your information at Integrityfee.mt.gov.  

If you are no longer a member of the HELP program, notify the Montana Department of Revenue by updating your information at Integrityfee.mt.gov.

Frequently Asked Questions

Why have I never heard of the Integrity Fee before now even though I have been enrolled in HELP?

This was passed in the 2015 Montana Legislative session. Changes to the language and requirement were passed by the 2019 Legislature.

If I fill this out, how will it affect my coverage?

It will not affect your coverage.

When will I get billed for this? Who sends the bill? How and to whom do I pay the fee?

Once the asset test has been submitted, and evaluation completed, a bill will be mailed within 30 days. We will begin this process in September 2020.

All payments concerning the Integrity Fee should be directed to the Department of Revenue.

Where do I find property tax information?

You can visit your county’s web page, search for either Treasurer or Property Taxes, and follow prompts or instructions on locating your personal property tax information.

You can also use Montana Cadastral.

What if I am in the process of selling my home?

You should submit your asset test for the assets you owned as of July 1, 2020.

If you sell your home of any vehicles, you can submit an amended asset test.

Do I need to include the MSRP for motorcycles, RVs, or ATVs?

No.

The definition of light vehicle does not include Motorcycles, RVs, or ATVs.

A light vehicle is a motor vehicle commonly referred to as an automobile, van, sport utility vehicle, or truck having a manufacturer’s rated capacity of 1 ton or less. (61-1-101 (31), MCA)

How do I find the MSRP for my vehicles?

You may choose to use the following websites or similar websites to find that information:

I own one vehicle for personal use and two for business use. Do I need to include all vehicles in Test 2 or just the personal vehicle?

Include just the personal use vehicle. We are reviewing personal assets, not business assets. If the business vehicles are driven for personal use, we will need to know the percentage of the personal use to calculate the fee.

Where does this money go?

All funds collected will be deposited into the Montana HELP Act Special Revenue Account to help cover the costs of the Montana HELP Program.

What if I do not complete the worksheet?

We strongly encourage participants to complete the worksheet using their current information.

If the first worksheet is not completed within 30 days, a second request will be mailed.

If we receive no response to the second request, we will use the information available to complete the form on behalf of the participant. Our information may not be current.

When does this need to be done before you manually assess the fee?

We will not manually assess the fee until September, although the fee is effective as of July 1, 2020. It is in your best interest to complete the asset test. They may not owe as much as the department assesses, or anything at all, depending on your responses.

What if I cannot pay? Will I lose coverage? Will the Department of Revenue assess penalties and interest?

We can set up payment plans and work with the individuals. No, you will not lose coverage. No, there is not penalties and interest.

I received this letter for a family member who is deceased. What should I do?

Please notify us about the deceased individual. We will update our records.

Why is the Department of Revenue assessing this fee instead of the Department of Public Health and Human Services?

Per House Bill 658 passed by the 2019 Montana Legislature, the Department of Revenue shall assess and collect the Integrity Fee.

What if I own my home, vehicles or land jointly with another person?

For joint ownership where two names are recorded on a title, the participant can report 50% of the property value and 50% of mortgage debt. The participant can report 50% of MSRP on vehicles and 50% of amount owed, not including interest. The participant can report 50% of the taxable value of the agricultural land. Remember this only pertains to land, not to buildings on the agricultural land.

Have You Received a Withholding Nonfiler Letter?

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Recently, the department sent letters to business owners who have not filed their 2019 Montana Annual W-2 1099 Withholding Tax Reconciliation (Form MW-3). The Form MW-3 was due January 31, 2020.

What we are asking you to do

  • Send us your Form MW-3, Forms W-2 with or without withholding, and Forms 1099 that report withholding by July 31, 2020.
  • Contact us if you do not believe you have a filing requirement or if your account is closed.

What happens if I don’t respond?

If you do not respond, we will estimate your withholding tax along with any penalties and interest based on the information available to us. You may have an additional penalty if you do not file within 60 days of receiving your letter.

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Additional Tips for Successful Filing

The Montana Department of Revenue reconciles employer information with the Forms W-2s or 1099s filed by employees or retirees. Many errors occur that can be easily avoided. Following the tips below will help employers and tax preparers reduce the chance of receiving a letter or phone call from us. This will also speed up the processing of tax refunds for employees or clients.

  • Complete all required fields
  • Use the correct Employer Identification Number (EIN)—use the EIN the IRS issued you. If you are a service provider, use the EINs issued to your clients.
  • Use the correct state account number. This number is formatted as XXXXXXX-XXX-WTH.
  • Make sure all copies of Form W-2 and Form 1099 are legible and no numbers are truncated or masked.
  • Use the correct Form W-2 and Form 1099 for the reporting year.
  • File Form MW-3 with your Forms W-2. Federal Form W-3 will not be accepted.
  • If you are reporting for Forms 1099 without withholding, do not send them with the Form MW-3. They should be filed with federal Form 1096.
  • If you file your Forms W-2 electronically, do not send a paper copy.

 

If you are mailing your information, please send it to:

Montana Department of Revenue
PO Box 5835
Helena, MT 59604-5835

Paycheck Protection Program (PPP) Tax and Deduction Clarifications

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The Paycheck Protection Program (PPP) is a loan at first that becomes a grant if certain requirements are met.

To the extent the loans are forgiven under the CARES Act, the amounts are not included in gross income and are not taxable.

IRS Notice 2020-32 provides that the business expenses paid with the loan-grant money are not deductible for federal tax purposes. Because the PPP is a loan-grant and not a credit, 15-30-2110(4), MCA, does not apply and the business expenses offset by the grant are not deductible for Montana tax purposes either.

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Net Operating Loss (NOL) Changes Due to COVID-19

by

On March 27, 2020, Congress enacted the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act. Among other things, the Act addresses net operating losses (NOLs) and other related provisions.

For example:

  • Section 2303 allows a five-year carryback for NOLs arising in the 2018, 2019, and 2020 tax years. Section 2303 also temporarily repeals the 80% of income limitation for tax years beginning before 2021.
  • Section 2304 temporarily repeals the loss limitation for individuals, estates and trusts under section 461(l) of the Internal Revenue Code for tax years beginning before January 1, 2021.
  • Section 2306 added a special rule to section 163(j) of the IRC for tax years 2019 and 2020.
  • Section 2307 made some technical amendments to section 168(e) of the IRC relative to qualified improvement property.

The above-provisions apply when a taxpayer calculates Montana taxable income.  Note, sections 2303 and 2304 don’t apply to C corporations having a Montana filing obligation.

As a result:

  1. Some taxpayers may have to amend their 2018 and 2019 tax returns;
  2. Individuals, estates and trusts with an NOL incurred in tax years 2018 or 2019 may carry their NOL back five years and amend the corresponding returns filed in those years. A waiver of the carryback period will be available on their 2020 Montana income tax return for each impacted tax year.

We recommend that individuals, estates and trusts who amend returns from tax years 2013 through 2019 to calculate or carry back an NOL wait until the department issues guidance on a revised Montana Form NOL covering the period 2018 through 2020.

For Corporations, amended return instructions and Net Operating Loss provisions remain unchanged. See the Corporate Income Tax Return Instructions for more information.

Subscribe for updates on COVID-19's impact on the Department of Revenue

Subscribe for Updates on COVID-19’s Impact to the Department of Revenue

Alcoholic Beverage Outreach Program

The Alcoholic Beverage Control Division (ABCD) is dedicated to supporting voluntary compliance through education and outreach. View the upcoming events where you’ll find us or submit a request for ABCD to participate in your event or provide education on requested topics.

Upcoming Outreach Activities

There are no events currently scheduled at this time.

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Previous Outreach Activities

DateEvent NameDescriptiionLocation
02/11/2020 @ 3:00 p.m.Montana Alcohol Laws & Rules Overview—Licensees and Members of the Public.A high-level overview of Montana’s alcoholic beverage laws & rules. presentation lasting about 1-2 hours. An open question and answer session will follow. Cottonwood Inn & Suite
54250 US Hwy 2
Glasgow, MT
2/13/2020 @ 2:00 p.m.Montana Alcohol Laws & Rules Overview—Law Enforcment and City OfficialsA high-level overview of Montana’s alcoholic beverage laws & rules. presentation lasting about 1-2 hours. An open question and answer session will follow. Stat Hangar at the Airport, Glasgow

Invite us to Your Event

We are available to participate in conferences, meetings, webinars, or other outreach events related to our mission. We may not be able to accommodate all requests, but in making our decision, among other things, we will consider:

  • Does the event fit within our mission or strategic goals?
  • Do we have the resources to support it?

Please contact us at least 90 days in advance if at all possible. We will respond within two weeks of receiving your inquiry.

We are interested in your feedback on outreach activities. If you attended a recent webinar, seminar, presentation, or other outreach event, please submit your comments to DORAlcoholicBeverageControl@mt.gov.

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