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Montana Tax Rebates – July Update

Since earlier this year when the state announced income and property tax rebates for eligible taxpayers, the Montana Department of Revenue has shared more information regarding these rebates – including credit amount changes, who qualifies and doesn’t qualify, and application instructions. We break out the details for each bill and rebate below.

Individual Income Tax Rebate (House Bill 192)

• The individual income tax rebate amounts remain unchanged. Here are the rebate amounts:
  • The rebate amount will be the lesser of:
    • The amount of your Montana income tax liability on line 20 of your 2021 Montana tax return, OR
    • $1,250 for single, married filing separately, or head of household filing statuses; and $2,500 for married filing jointly.
  • Starting on July 1, the rebates will be issued in the order that a 2021 Montana tax return was filed, and according to the information provided on that tax return (direct deposit or paper check). These rebates will be issued up until December 31.
  • The Montana Department of Revenue added a link on its website for individuals to check the status of their income tax rebate, including if they qualify for the rebate and when the rebate will be processed. Please go to https://tap.dor.mt.gov, then under Quick Links select Where’s My Rebate?
  • If a taxpayer has an outstanding obligation with the state, the income tax rebate will be used to pay that liability first; any remaining rebate amount will then be issued directly to the taxpayer.
  • Currently, the taxability of the state income tax rebate at the federal level is still under review by the IRS. The rebate is not subject to Montana income tax.
  • If you filed as a resident of another state, even though you worked in Montana during the entire 2021 tax year, you will not be eligible for the rebate.
  • If a taxpayer filed a 2021 Montana tax return and is now deceased, the taxpayer’s estate could still be eligible for the rebate.

Property Tax Rebate for 2022 & 2023 property taxes paid (House Bill 222)

• The 2022/2023 property tax rebate amount has changed. Originally there was only one rebate amount for $500, but there is now a second rebate amount of $675. Here are examples of how the rebate amount is determined:
  • Taxpayers who owe $500 in property taxes on a Montana residence in 2022/2023 will receive a $500 rebate.
  • Taxpayers who owe $1,200 in property taxes on a Montana residence in 2022/2023 will receive a $675 rebate.
  • At our publication date, no further clarification or detail on these phaseouts was available. We will provide it as soon as it becomes available.
• Taxpayers need to apply online at https://tap.dor.mt.gov to claim this rebate. The application portal for the 2022 tax rebate will open August 15 and close October 1. (Clarifying detail was not available, therefore we strongly recommend eligible taxpayers file their applications before 11:59 p.m., September 30.) The 2023 tax rebate portal will open on August 15, 2024.
  • The items needed to apply for this rebate include:
    • Physical address and geocode of the Montana residence.
    • The amount of property taxes paid as reflected on the property tax bill.
    • Names and Social Security numbers for you, your spouse, and any dependents listed on your Montana tax return.
    • The Letter ID notice that was mailed (if applicable).
    • The mailing address or bank account information to receive the rebate.

• Montana residences that qualify for this rebate include single-family homes, apartments, condos, trailers, manufactured homes and mobile homes. This includes surrounding land not exceeding 1 acre.
• Individuals may receive two separate mailings about these rebates in June and/or July. However, receiving these mailings does not mean you automatically qualified to receive the rebate.
• Like the income tax rebates, the taxability of the property tax rebate on the federal level is still under review by the IRS. The rebate is not subject to Montana income tax.
• Like the income tax rebates, if an individual has an outstanding obligation with the state the rebate will be used to pay that liability first; any remaining rebate amount will then be issued to the taxpayer.
• Grantor revocable trusts that hold a Montana residence can qualify for the rebate.
• In situations where a taxpayer qualified for this rebate but has since deceased, a personal representative of the deceased’s estate may file the rebate claim on behalf of the deceased taxpayer.
• If the Montana residence is claimed under an LLC or corporation it does not qualify for this rebate.
• Renters do not qualify for this rebate.

* This article is not a complete listing of all the details related to this business / accounting topic and you should contact your CPA for a more detailed discussion regarding these items and how they may apply to your specific situation.

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