1. What Is Montana State Tax Filing?
Montana state tax filing refers to the process of reporting certain types of
income to the
Montana Department
of
Revenue.
Importantly, Montana imposes a state personal income tax on
individuals and a corporate income tax on businesses.
Filing obligations may also apply to nonresidents with Montana-source income,
pass-through entities such as partnerships and S corporations, estates and trusts,
and businesses subject to specialized taxes, including mining license tax,
oil and gas production taxes, and other industry-specific taxes.
This is separate from federal income tax filing with the IRS.
2. Who Must File in Montana?
Individuals are generally required to file a Montana State Tax return if they meet state income thresholds or earn Montana-source income. Filing requirements depend on residency status and the type of income earned during the tax year.
Common situations where filing is required
- Montana residents who meet income thresholds must file Form 2 to report their worldwide income.
- Part-year residents must file a Montana return for the portion of the year they lived in or earned income from Montana.
- Nonresidents are required to file if they earn Montana-source income, such as wages, business income, rental income, or royalties connected to the state.
- Individuals or entities subject to specialized state taxes, including mining license tax or oil and gas production taxes, must file applicable Montana tax forms.
- Taxpayers with Montana tax withheld may need to file a return to reconcile withholding or claim a refund.
3. Montana Tax Forms – What to File
Montana requires individuals to file a personal state income tax return if they meet state income thresholds or earn Montana-source income. The type of form required depends on residency status and the nature of the income.
Common Montana tax forms
-
Form 2 – Montana Individual Income Tax Return
Used by residents, part-year residents, and nonresidents to report Montana taxable income, adjustments, credits, and tax due. -
Form CIT – Montana Corporate Income Tax Return
Required for C corporations doing business in Montana or earning Montana-source income. -
Pass-through entity withholding and informational forms
Partnerships, S corporations, and certain LLCs may be required to file informational returns or withhold Montana tax on behalf of nonresident owners. -
Mining License Tax filings
Applicable to qualifying mining operations conducting activities in Montana. -
Oil & Gas production and property tax filings
Required for businesses engaged in oil and gas extraction or production within the state.
Choosing the correct Montana tax form depends on your residency status, income source, and business structure. Filing the appropriate forms on time helps ensure compliance with Montana Department of Revenue requirements.
4. Documents Required for Montana Tax Filing
If you are required to file a Montana state tax return, prepare the following documents in advance:
- W-2 and 1099 forms: showing wages or other income earned in Montana or subject to Montana income tax
- Federal tax return (Form 1040): used as the starting point for Montana income and deduction calculations
- Montana withholding records: showing any Montana State Tax withheld (such as Form W-2, 1099, or state withholding statements)
- Business, rental, or industry income records: income, expenses, depreciation, and supporting documentation
- Prior Montana tax returns (if any): for reference, consistency, and carryforward items such as losses or credits
NEED HELP WITH MONTANA STATE TAX FILING?
Confirm whether you have any Montana filing obligation and get clear guidance on forms, deadlines, and compliance.
Get Montana Tax Help5. DIY vs Accountant vs Managed Filing
Non-US founders and remote business owners with Montana filing obligations typically choose one of three approaches: DIY filing, hiring an accountant, or using managed tax filing services.
What typically increases complexity?
- Montana-source income (wages, business income, rentals, mining, oil & gas)
- Multi-state operations and income apportionment requirements
- Pass-through entities with Montana nexus or reporting obligations
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|---|---|---|---|
| Built for non-US founders | ✅ Deep non-resident focus | ➖ Limited support | ➖ Generic templates |
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6. Step-by-Step: Montana State Tax Filing
Step 1: Confirm your Montana filing requirement
Determine whether you are a Montana resident, part-year resident, or nonresident. Filing is generally required if you meet Montana income thresholds or earn Montana-source income. Residency status directly affects how income is reported and taxed.
Step 2: Gather federal tax information (IRS)
Montana state tax returns are closely linked to your federal return. Begin by preparing your federal income tax return with the Internal Revenue Service (IRS), typically using Form 1040. Federal adjusted gross income serves as the starting point for calculating Montana taxable income.
Step 3: Verify EIN for business or pass-through income
If you operate a business, partnership, LLC, or S corporation, ensure you have a valid Employer Identification Number (EIN) issued by the IRS. An EIN is required to report business income, file withholding returns, and comply with Montana business tax obligations. You can apply for or verify an EIN directly through the IRS EIN application portal.
Step 4: Complete the appropriate Montana tax form
Most individuals file Form 2 (Montana Individual Income Tax Return). Businesses and corporations may need to file additional forms such as Form CIT or pass-through entity withholding forms, depending on their structure and activities in Montana.
Step 5: File and pay by the deadline
Montana individual income tax returns are generally due by April 15. An automatic extension to October 15 is available if a federal extension is filed, but any tax owed must still be paid by the original deadline to avoid penalties and interest.
Step 6: Retain records and plan ahead
Keep copies of your filed federal and Montana returns, payment confirmations, and supporting documents. Maintaining organized records and monitoring IRS and Montana Department of Revenue guidance throughout the year can help simplify future filings and reduce compliance issues.
7. Tips to Avoid Montana Tax Notices
- Confirm whether you are required to file based on residency status and income thresholds
- Report all Montana-source income accurately, including wages, business, rental, and other taxable income
- File by the Montana filing deadline (generally April 15 for individual income tax returns)
- Keep clear records of income sources, deductions, credits, and any income apportionment calculations
- Respond promptly and completely to any correspondence from the Montana Department of Revenue
8. Montana Tax Costs, Penalties, and Filing Timelines
- Personal income tax rates: Progressive rates ranging from approximately 1% to 6.75%, depending on taxable income and filing status.
- Late filing penalty: 5% of the unpaid tax per month, up to a maximum of 25% of the tax due.
- Late payment penalty: 0.5% of the unpaid tax per month, up to a maximum of 12%.
- Interest on unpaid tax: Accrues daily at rates set annually by the Montana Department of Revenue.
- Filing extensions: An automatic extension to October 15 is available if a federal extension is filed; however, tax payments are still due by the original deadline (generally April 15).
| Task | Typical Timing | Notes |
|---|---|---|
| Document collection | January – April | W-2s, 1099s, federal return, and Montana withholding records |
| Montana individual income tax return (Form 2) | Due April 15 | Applies to residents, part-year residents, and nonresidents with Montana-source income |
| Extension deadline | October 15 | Extends filing deadline only; payment is still due by April 15 |
| Payment of tax due | April 15 | Late payments may trigger penalties and interest |
| Record retention | After filing | Keep copies of filed returns and payment confirmations |
| Ongoing tax planning | Throughout the year | Helps manage withholding and avoid underpayment penalties |
9. Common Federal & Montana Tax Forms
Federal Tax Forms (Commonly Used)
- Form 1040 – U.S. Individual Income Tax Return
- Schedule C – Profit or Loss From Business (sole proprietors)
- Schedule E – Supplemental Income (rentals, royalties, pass-through income)
- Schedule K-1 – Partnership or S-Corporation income reporting
Montana Tax Forms
- Form 2 – Montana Individual Income Tax Return (used by residents, part-year residents, and nonresidents)
- Montana Individual Income Tax Schedules – Used to report Montana-source income, adjustments, and credits
- Form CIT – Montana Corporate Income Tax Return for C corporations with Montana nexus
- Pass-through entity withholding and informational forms – For partnerships, S corporations, and certain LLCs with Montana-source income
- Mining License Tax filings – Applicable to qualifying mining operations in Montana
- Oil & Gas production and property tax filings – For applicable energy-sector activities
10. Conclusion
Montana imposes a personal state income tax on residents, part-year residents, and nonresidents with Montana-source income. While tax rates and filing rules vary based on residency status and income type, understanding your specific obligations is essential to remaining compliant.
Taking the time to confirm your filing requirements helps you avoid penalties, processing delays, and unnecessary notices. FormLLC can help review your Montana tax obligations and guide you through the filing process clearly and efficiently.
