Partnerships, S corporations, and disregarded entities must withhold income tax for owners if the owner’s share of income is at least $1,000 and the owner is a:
- Nonresident individual, estate, or trust,
- Tax-exempt entity administered outside Montana,
- Foreign C corporation, or
- Second-tier pass-through entity.
Pass-Through Withholding Tax Rates
The pass-through entity must withhold a percentage of the owner’s Montana source income. The rate of tax withheld depends on the type of owner:
- Nonresident Individuals, Estates, Trusts, and all Second-Tier Pass-Through Entities
- Foreign C Corporations and Tax-Exempt Entities Administered Outside Montana
The pass-through entity need not withhold taxes for:
- An owner with a valid Montana Pass-Through Owner Tax Agreement (Form PT-AGR) (15-30-3313, MCA)
- An owner included on a composite tax return
Pass-through withholding tax is due at the same time as your Montana Information and Composite Income Tax Return, not including extensions.