Written by: Alexander Clark
In July 2023, the Montana Department of Revenue will begin issuing state income tax rebates to qualifying taxpayers. The rebate amount depends on the individual’s tax filing status for 2021 and the amount reported on line 20 of their Montana Form 2. The most an individual will receive is $1,250 and the most a married couple will receive is $2,500.
You qualify for the Individual Income Tax Rebate if:
- you were a resident of Montana from January 1, 2021, through December 31, 2021;
- you filed a 2020 Montana resident or part-year resident tax return before the deadline (including extensions);
- you filed a 2021 Montana resident tax return before the deadline (including extensions);
- you weren’t claimed as a dependent by another taxpayer on a Montana or federal income tax return in 2021; and
- Line 20 of your 2021 Montana Form 2 has an amount greater than zero.
HOW MUCH IS THE REBATE?
The rebate is $2,500 for married couples or the amount shown on line 20 of your 2021 Montana Form 2, whichever is less. The rebate for those who filed single, head of household, or married filing separately is $1,250 or the amount shown on line 20, whichever is less.
For example, Michael met all qualifications for the rebate, filed as single, and reported $1,000 on line 20. His rebate will be $1,000.
Mary met all qualifications for the rebate, filed as single, and reported $2,000 on line 20. Her rebate will be $1,250.
Carmen and Jeff met all qualifications for the rebate, filed jointly as married, and reported $2,000 on line 20. Their rebate will be $2,000.
Tom and Linda met all qualifications for the rebate, filed jointly as married, and reported $3,000 on line 20. Their rebate will be $2,500.
Frank and Denise met all qualifications for the rebate, filed separately, Frank reported $2,000 on line 20, and Denise reported $400 on line 20. Frank’s rebate will be $1,250 and Denise’s rebate will be $400.
HOW DO I CLAIM THE REBATE?
You do not need to take any action to claim the rebate. Rebates will be issued in the same manner as your 2021 return was disbursed. For example, if you filed electronically and requested a direct deposit of your refund or direct withdrawal of your additional tax owed, then the rebate will be deposited into that account. If you filed by mail, a paper check will be mailed to the address on the return.
WHEN WILL I RECEIVE MY REBATE?
The Department of Revenue will begin issuing rebates in July 2023. By law, the state must issue all rebates by December 31, 2023.
IS THE INCOME TAX REBATE TAXED?
The rebate is not subject to Montana income tax. The IRS is reviewing whether the rebate is subject to federal income tax.
WHAT THE TAXPAYER IS NOW DECEASED?
The deceased taxpayer who meets the qualification is eligible for the income tax rebate.
WHERE CAN I FIND MORE INFORMATION?
The Montana Department of Revenue will post updates and the online application to its website. Please contact the experienced tax attorneys at Worden Thane P.C. with your questions about taxes and more.