Taxpayers may be subject to penalties and interest for failing to file or pay taxes and fees by the due date.
Late File Penalty
Montana charges a penalty for filing after the due date.
The penalty is:
- A $50 minimum, or
- 5% of the outstanding tax per month
- Up to a maximum of 25% of the tax due
Late Payment Penalty
Montana charges a penalty if a taxpayer fails to pay 100% of the tax liability by the original due date.
Montana charges interest on outstanding taxes and underpaid estimated taxes.
Interest is compounded daily, beginning on the original due date:
- 5% annual (0.01370% daily) interest on Individual Income Tax and Underpayment of 2018 Estimated Taxes
- Other Taxes:
- January 1, 2019 – June 30, 2019: 12% annual (0.03288% daily)
- July 1, 2019 – December 31, 2019: 8.25% annual (0.0226% daily)
Failure to File Penalty
Montana charges a penalty for purposely or knowingly (as defined in 45-2-101, MCA) failing to file a return or report by the due date or within 60 days of receiving a notice from the department.
- Pass-through Entities
- All Other Filers
- 15% per month, up to 75% of the tax due
Frivolous Return Penalty
Montana charges a $2,500 penalty for taxpayers who file a return:
- Without the information needed to determine tax
- Showing substantially incorrect tax
- Based on a frivolous tax position (26 USC 6702)
- Based on actions meant to impede tax collection
Fraudulent Return Penalty
Montana charges a penalty if a taxpayer files a fraudulent return and:
- Tax is due: 75% of the tax due that is related to the fraudulent amount reported
- The taxpayer has no tax liability and filed a fraudulent claim for a credit: 75% of the credit claimed
Montana charges a penalty when a taxpayer understates their tax liability:
- Individuals, Estates and Trusts
- Individuals, estates and trusts may be subject to the penalty if their understatement is more than $3,000.
- All Other Taxpayers
- All other taxpayers are subject to the penalty if their understatement is at least $10,000 and the understatement is at least 10% of the amount determined by the department.
The penalty is equal to 20% of the understatement.
An understatement equals the amount determined by the department minus the amount originally reported by the taxpayer.
Requesting a Waiver
If you have paid the entire amount of tax and interest assessed on your account within 30 days of receiving a notice, you will receive an automatic waiver of the late payment penalty.
If you do not pay your tax and interest within 30 days of receiving a notice, you must submit a request for waiver in writing, or mark the Request for Waiver of Late Payment Penalty Only box on our Request for Informal Review (Form APSL101F). Your written request must establish reasonable cause for the late payment.
Please send your request to the department by:
Montana Department of Revenue
PO Box 7149
Helena, MT 59604-7149