Supported Forms

The following Montana forms are supported in Drake Tax 2024. MT forms cannot be e-signed.

Form	Description	IND	CRP	SCRP	PTR	FID
2	Montana Individual Income Tax Return	t
2441-M	Child and Dependent Care Expense Deduction	t
ADPT	Montana Adoption Tax Credit	t
AMD Worksheet	Montana Individual Income Tax Amended Return Reconciliation	t
CIT	Montana Corporate Income Tax Return		t
CIT-UT	Underpayment of Estimated Tax by Corporation		t
CT	Montana Corporate Income Tax Payment Voucher		t
ESA Worksheet	Estimated Tax Annualization Worksheet	t
EST-I	Interest on Underpayment of Estimated Tax by Individuals, Estates and Trusts	t				t
ESW Worksheet	Montana Estimated Tax Worksheet	t
ETM	Enrolled Tribal Member Exempt Income Certification/Return	t
FID	Montana Estate or Trust Tax Payment Voucher					t
FID-3	Montana Income Tax Return for Estates and Trusts					t
Form 2 Worksheet	Line 33 – Partial Retirement Disability Income Exemption for Taxpayers Under Age 65	t
Form 2210 Worksheet	Worksheet I – Calculation of Underpayment Interest Short Method			t	t
FRM	Montana Farm and Ranch Risk Management Account	t
FTB	Montana First-Time Home Buyer Savings Account	t
FTB-Worksheet	Montana First-Time Home Buyer Savings Account	t
IT	Montana Individual Income Tax Payment Voucher	t
IUFC	Infrastructure User Fee Credit	t	t	t	t
JGI	Jobs Growth Credit	t	t	t	t	t
LTCG Worksheet	Long-Term Capital Gains Tax Worksheet	t
MTFID3WK	Credit for an Income Tax Liability Paid to Another State or Country Worksheets					t
MTFPPAWK	Partial Pension, Annuity, and IRA Income Exemption Worksheet					t
MTWK_AI	Apportionable Income Worksheet				t
NOL	Montana Net Operating Loss (NOL) for Individuals, Estates, and Trusts	t
POA	Power of Attorney Authorization to Disclose Information	t	t	t	t	t
PR	Montana Partnership Tax Payment Voucher				t
PT-AGR	Pass-Through Entity Owner Tax Agreement			t	t
PTE	Montana Pass-Through Entity Tax Return			t	t
PTE-C Worksheet	Estimated Composite Tax Worksheet			t	t
QEC	Qualified Endowment Credit	t	t			t
RCYL	Recycle Credit/Deduction	t	t	t	t
SB	Montana Small Business Corporation Tax Payment Voucher			t
Schedule K-1 (FID-3)	Beneficiary’s Share of Income (Loss), Deductions, Credits, etc.					t
Schedule K-1 (PTE)	Owner’s Share of Income (Loss), Deductions, Credits, etc.			t	t
VT	Veterans’ Program Contribution and Deduction	t

New Form

Form EST-PTI. A form to help determine interest on underpayment of estimated tax for composite tax and pass-through entity tax is available starting in tax year 2024. Form EST-PTI can be used to determine whether underpayment interest is due on either standard or annualized estimated payments. See Form EST-PTI instructions for more information.

Modified Forms and Worksheets

• Form 2, Montana Individual Income Tax -Form 2 has changed as a result of income tax simplification. The form will no longer consist of every schedule that a taxpayer may use to file the Form 2. Schedules have been separated from the Form 2 and are available on separate pages.

• Pages 1 and 2. Most taxpayers will only need to complete pages 1 and 2 to file their Montana tax return. Page 1 includes your Montana taxable income, credits, payments, and your tax liability. Page 2 is used to calculate the Montana resident income tax liability.

• Schedule I – Montana Adjustments to Federal Taxable Income. Schedule I reports Montana adjustments, which are additions, subtractions, and Montana Medical Savings Account information. The items reported on this schedule were previously reported on the Additions, Subtractions, and Montana Medical Savings Account (MSA) Schedules.

• Schedule II – Tax on Montana Source Income. Previously, nonresidents and part-year residents reported their Montana source income and determined the nonresident/part-year resident ratio on the Nonresident/Part-Year Resident Ratio Schedule. This information, along with the determination of Montana tax, is now reported on Schedule II. Additionally, Montana residents filing jointly with nonresident or part-year resident spouses use Schedule II to determine their Montana tax

• Schedule III – Tax Credits. This schedule is used to report Montana nonrefundable and refundable tax credits, and to calculate the credit for income taxes paid to another state or country. Previously, nonrefundable tax credits were reported on the Nonrefundable Credits Schedule and refundable tax credits were reported on the Other Payments and Refundable Credits Schedule.

• Schedule IV – Contributions, Penalties, Interest, and Other Taxes. Schedule IV is used to report check-off contributions, penalties, interest, and recapture and lump sum taxes. Check-off contributions, interest on the underpayment of estimated taxes, and penalties were previously reported on the Contributions, Penalties, and Interest Schedule. Lump sum and recapture taxes were previously reported on the Tax Liability Schedule.

• Schedule V – Amended Return Information. Taxpayers amending a 2024 Form 2 report information about the amendment on Schedule V. This information was previously reported on page 2 of the Form 2.

• Schedule 2EC – Montana Elderly Homeowner/Renter Credit. The Schedule 2EC was formerly the Elderly Homeowner/Renter Credit Schedule. The Attestation section was added to reinforce the eligibility requirements to claim the credit. In an effort to ensure all household income is reported, as well as verify that only one credit is claimed per household, the form now asks for the number of persons living in the household. The reporting of household income on lines 1 through 18 was expanded because the items included in household income are no longer reported on the Form 2. Previously, this information was found on Form 2, pages 1 and 3. The calculation and amount of the credit remain unchanged.

• Form DE. The Form DE is new as of tax year 2024 and is used to report Montana source business income of single member limited liability companies (LLC) and sole proprietorships owned by nonresident individuals, estates, and trusts. This form is also used to figure the alternative method tax for eligible nonresidents under section 15-30-2104, MCA.

• FID3 The department made changes to the Montana Form FID-3 to implement simplification under Senate Bill 399 and to improve reporting income distributions and sourcing. Changes were also made because House Bill 221 replaced the capital gains credit with new brackets that apply to net long-term capital gains. The form no longer requires the detail of lines 1 through 16 of the federal Form 1041 and begins with line 17.

• Form PTE, Montana Pass-Through Entity Tax Return

  • Added “PTET” and “Resident PTET” options to header

  • Revised content and order of content on pages 2 – 4

    • Page 3 – Added Flow-Through Payments Schedule

    • Page 4 – Relocated Schedules I and II

• Schedule K-1 (PTE), Owner’s Share of Income (Loss), Deductions, Credits, etc.

  • Added line 14 to Part 4 – “Total distributive share”

  • Added line 1 to Part 5 – “PTE paid on behalf of owner”

Obsolete Forms

The following worksheets and schedules have been discontinued because their underlying provisions have been repealed.

• Class A/B NOL Carryover Determination Schedule

• Filing Status 2a Payment Schedule

• Form 2441-M, Child and Dependent Care Expense Deduction

• Form FRM, Farm and Ranch Risk Management Account

• Form FTB, First-Time Homebuyer Savings Account

• Form NOL, Montana Net Operating Loss

• Form VT, Veterans’ Program Contribution and Deduction

• Itemized Deductions Schedule

• Partial Pension, Annuity, and IRA Income Exemption Worksheet

• Refund Schedule

• Schedule 1

• Standard Deduction Worksheet

• Taxable Social Security Benefits Worksheet

Tax Law Changes

• Expanded Qualified Endowment Credit. The Qualified Endowment Credit, a tax credit for taxpayers that make charitable donations to qualified endowments, has increased. The credit is equal to 40% of the present value of a planned gift up to $15,000.

• FID3 Net Long-Term Capital Gains Tax Rate. House Bill 221 created two new tax rates, 3% and 4.1% for net long-term capital gains beginning in tax year 2024. The rates are contingent on the fiduciary’s total taxable income which is not net long-term capital gains. Fiduciaries can no longer claim the capital gains tax credit that expired with the 2023 tax year.

• FID3 Reduced Tax Rate. Under Senate Bill 399 (2021), the top marginal tax rate was reduced from 6.75% to 6.5% beginning with tax year 2024. Senate Bill 121 (2023) reduces the top marginal tax rate from 6.5% to 5.9%.

• Filing statuses. Under the new law, taxpayers must use the same filing status used on the federal tax return.

• Filing requirements. The Montana tax filing requirement follows the federal tax filing requirement after considering any Montana additions and subtractions to federal taxable income.

• Income Tax Simplification Montana Form 2 has been redesigned as a result of legislation passed in 2021. This legislation significantly altered Montana’s individual income tax system by making changes to filing statuses, tax brackets, and the calculation of Montana taxable income.

• Military Retirement Income and Survivor Benefits Exemption for Certain Taxpayers. Under Senate Bill 104, certain taxpayers may be eligible for an exemption of part of their military retirement income. Taxpayers who become residents after June 30, 2023, or who were Montana residents before receiving military retirement can exempt the lesser of:

  • 50 percent of the taxpayer’s military retirement income received from Defense Finance and Accounting Service (DFAS), or

  • Beneficiaries receiving military survivor benefits are eligible for a subtraction of 50 percent of the benefits if they became residents after June 30, 2023, or were residents before receiving the benefits.

  • Net income from a trade or business

  • Net income from farming activities in Montana

  • This exemption is claimed on Form WMRE.

  • The exemption is only available for five consecutive years after becoming a resident. If the taxpayer was a resident and began receiving military retirement while a resident of the state before July 1, 2023, the exemption can only be claimed for five years beginning with tax year 2024.

  • The total Montana source income from Wages, salary, and tips from compensation performed in Montana

• Montana net operating loss repealed. The Montana net operating loss adjustment under section 15-30-2119, MCA, was repealed as of January 1, 2024.

• Net long-term capital gains are now taxed at lower rates than Montana ordinary income. Montana ordinary income is all income that is not considered a net long-term capital gain. As a result, the capital gains tax credit has been repealed.

• New subtraction. Taxpayers aged 65 and over receive a $5,500 subtraction from federal taxable income. If filing jointly and both spouses are 65 and over, the subtraction is equal to $11,000. The subtraction will be adjusted annually for inflation beginning with tax year 2025.

• New tax rates. Montana’s tax brackets have been reduced from seven rates to two rates and are based on a taxpayer’s filing status.

• Pass-through entity tax and pass-through withholding are assessed at a tax rate of 5.9% beginning in tax year 2024. Previously, they were assessed at 6.75 percent.

• Reduced Tax Rate and Increased Earned Income Tax Credit. Under Senate Bill 399 (2021), the top marginal tax rate was initially reduced from 6.75% to 6.5% beginning with tax year 2024. Senate Bill 121 (2023) further reduced the top marginal tax rate from 6.5% to 5.9%. The Montana Earned Income Tax Credit increased from 3% of the federal credit to 10% of the federal credit

• Repealed deductions. Several deductions have been repealed, including:

  • Contributions to a Montana First-Time Homebuyer Savings Account

  • Dependent child’s income included in the taxpayer’s federal adjusted gross income

  • Deposits in a Montana Farm and Ranch Risk Management Account

  • Health insurance premiums paid by an employer for an employee

  • Partial interest income deduction for taxpayers aged 65 or older

  • Partial pension, annuity, and IRA deduction

  • Partial retirement disability deduction for taxpayers under age 65

  • Student loan repayments for health care professionals and qualified educators

  • Tip income for certain service industry workers

  • Unemployment compensation

  • Worker’s compensation benefits not already excluded in federal adjusted gross income

• Single Receipts Factor. Beginning with tax periods after December 31, 2024, multi-state entities filing in Montana will no longer use the property, payroll, and double-weighted receipts factors to arrive at the apportionment factor. Instead, the apportionment factor will consist of a single receipts factor