Montana Department of Revenue

Co-tenants and the Elderly Homeowner/Renter Credit

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Co-tenants and the Elderly Homeowner/Renter Credit

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We’ve been asked if individuals renting an apartment or a house as co-tenants are considered a single household or two households for the Elderly Homeowner/Renter Credit. The department recognizes the need for guidance for such arrangements.

The department will not approve the existence of two separate households when family members share a dwelling, regardless of how they share expenses or if they have separate contracts.

15-30-2115, MCA describes family members and includes:

  • Ascendants
  • Descendants
  • Aunts
  • Uncles
  • Nieces
  • Nephews
  • Step-mothers
  • Step-fathers
  • In-laws
  • Former spouses

Statute already excludes tenants or roomers when they have separate contracts.

When two or more tenants do not have separate contracts, we will approve separate households if the unrelated tenants can show:

  • They each appear on the lease or rental agreement;
  • They have equal responsibility with regards to essential utilities: water, power, heat (cost of non-essential utilities such as phone or cable may be borne by one of the tenants);
  • They do not share any other essential expenses such as medical, education, travel; and
  • They do not own interest in the same business venture except for investments in traded securities.

Learn more about the Montana Elderly Homeowner/Renter Credit.

Five elderly women sitting on a park bench outside of a building.

First Estimated Tax Payments Due April 15

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All individual taxpayers, except farmers and ranchers, must make estimated income tax payments if their estimated tax liability for 2019 after withholding and credits is more than $500.

Taxpayers receiving income from a source other than wages must use the Individual Estimated Income Tax Worksheet (ESW) to determine if they need to make estimated tax payments and to calculate their quarterly payments.

The ESW worksheet for the 2019 tax year is located in Publication 1: Prepaying Income Tax available in My Revenue.

The pre-payment must equal either:

  • 100% of the preceding tax year (safe harbor) if the individual filed a Montana individual income tax return for 12 months, or
  • 90% of the tax for 2019 tax year.

If your income decreases in 2019 for reasons unforeseen, or your activity is seasonal, use the annualization worksheet, which allows you to adjust your quarterly payments accordingly.

The annualization worksheet is also available in Publication 1.

You can make estimated individual income tax payments by:

The word "Tax" handwritten on a checkbook register

Wage Withholding – Time to Register for the ABC Clinic Near You

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The Montana Department of Revenue will again partner with the Montana Department of Labor & Industry for the 2019 Assistance for Business Clinics (ABC) across the state.

The clinics provide updated information to new and established businesses, accountants, bookkeepers, human resource professionals and attorneys.

The clinics will address electronic filing options and the new Montana Employee’s Withholding Allowance and Exemption (Form MW-4).

Download the schedule and registration form from the Department of Labor and Industry’s Assistance for Business Clinics website.

We look forward to seeing you at the clinic nearest you.

2019 ABC Clinic Registration Table Preview

Assistance for Business Clinics Schedule and Registration Information

How to Make Voluntary Contributions on Your Tax Return

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You can use your tax return to donate to four programs:

Nongame Wildlife Program
Your contributions ensure the well-being of Montana’s watchable wildlife species.
Child Abuse Prevention
Your contributions fund services and activities related to the prevention of child abuse and neglect.
Agriculture Literacy in Montana Schools
Your contributions ensure Montana’s young people have a better understanding of agriculture in our state.
Montana Military Family Relief Fund
Your contributions provide funding for grants that aid Montana families when a wage earner has been called to active military duty.

To donate, mark one of the boxes on the Contributions, Penalties and Interest Schedule on page 10 of the Montana Individual Income Tax Return (Form 2).

You may decide to donate $5, $10, $20, or any other amount you choose.

Your contribution will reduce the amount of refund or increase your tax due.

Taxpayers filing separately on the same form can now each donate separately to the program of their choice.

Six hands holding up letter shaped balloons spelling out the word "DONATE"

Social Security, Pensions and Qualified Plan Distributions are only Taxable in the State of Residence

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Retirees who moved out of state often contact the department asking if their social security benefits or other qualified plan distributions are taxable in Montana.

The general rule, which allows few exceptions, is that social security benefits, pensions and annuity payments, and distributions from qualified plans such as defined benefits, 401k plans, IRA plans and so on, are sourced to the state of residence of the beneficiary when the payments are received.

This means that if retired taxpayers move to a new state, their retirement income is sourced to their new state and are not taxable in Montana from the date taxpayers gain tax residency status in their new state. When this is the case, such income is not reportable as Montana source income on Form 2. If taxpayers requested a voluntary withholding of Montana tax, they must contact their payor to stop that withholding.

Some words of caution are necessary.

Gaining attributes of residency in another state such as license plates, or a driver’s license is not always enough to relinquish tax residency in Montana, especially if you maintain a home or a dwelling in the state.

Residency for tax purposes is dependent on all facts and circumstances. We advise taxpayers to either talk to a tax practitioner or call the department to make sure their residency status has changed.

Retired Couple

Interest on Underpayment of Estimated Taxes on Form 2

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We require estimated tax payments when the taxes owed after the deduction of credits and withholding is more than $500. Publication 1 describes when a taxpayer must make estimated taxes.

You do not need to make estimated tax payments if you derive at least 2/3 of your gross income from farming or ranching operations. If estimated tax payments aren’t required, there cannot be an underpayment and no interest is due.

Be sure to mark the “2/3 farming gross income” box on the Contributions, Penalties and Interest Schedule, line 3 when claiming the exemption to pay estimated taxes for farmers and ranchers.

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