Taxpayers may be subject to penalties and interest for failing to file or pay taxes and fees by the due date.
Montana charges a penalty for filing after the due date.
The penalty is:
Months Late (Rounded Up) X 0.05 X Outstanding Balance = 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 of the tax return.
To figure out your interest rate, use this formula:
Daily Interest Rate x Outstanding Balance x Days Late = Interest
Example:
For an individual with $300 outstanding balance, 133 days late:
0.0001918 x $300 x 133 = $7.65
In case you owe tax from a prior year or years, please refer to the following table of Montana's historical interest rates:
Interest Rates | ||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
Individual Income Taxes, Estate and Trust, and Pass-Through Entities | 8.00% | 8.00% | 8.00% | 4.00% | 5.00% | 5.00% | 3.00% | 3.00% | 5.00% | 7.00% |
All Other Tax Types | 12.00% | 12.00% | 12.00% | 12.00% | 5.20% | 8.00% | 6.25% | 6.25% | 9.25% | 11.50% |
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 | $1,000 |
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All Other Filers | 15% per month, up to 75% of the tax due |
Montana charges a $2,500 penalty for taxpayers who file a return:
Montana charges a penalty if a taxpayer files a fraudulent return and:
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 10% of the amount of tax or $3,000. |
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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.
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.
You may request a waiver of penalty if you have reasonable cause. Reasonable cause means that you exercised ordinary business care but were still unable to meet a department deadline. You must submit your waiver in writing. You may either file the Request for Informal Review (Form APLS101F) or send us a written request. Your waiver request must establish reasonable cause for the late payment.
Please send your request to the department by: