During this year’s legislative session, Montana’s Republican-controlled Legislature made a significant decision by directing hundreds of millions of dollars from the state’s impressive budget surplus towards income and property tax rebates. Governor Greg Gianforte signed these rebates into law in March, and now, with income rebates set to be distributed to homeowners in July, it’s crucial for taxpayers to be informed. Here’s what you need to know.”
If you were a full-year resident of Montana and promptly paid your state taxes on the income earned in both 2020 and 2021, you are entitled to receive a rebate of up to $1,250 for your 2021 taxes. In case you meet these requirements but paid less than $1,250 in taxes for the year 2021, you will receive a full refund of the amount you paid.
Property Tax Rebates for 2022 and 2023
The maximum rebate cap of $1,250 is applicable to individuals who filed their taxes as single taxpayers, heads of household, or married taxpayers who filed separately. However, married couples who filed jointly have the opportunity to qualify for up to twice that amount, receiving a rebate of $2,500. According to the law, individuals who were not registered as full or part-year residents in 2020 or failed to make timely payments for their 2020 or 2021 taxes will not be eligible for these rebates.
Homeowners have the opportunity to claim rebates for their 2022 and 2023 property taxes, with a maximum amount of up to $675 per year. To qualify for this rebate, you must own the property as your principal residence, which is defined as the place where you have lived for at least seven months of the year.
If you paid less than $675 in property taxes for either the year 2022 or 2023, you will be eligible to receive a full refund of the amount you paid in property taxes for that specific year. This rebate presents a beneficial opportunity for homeowners to ease their tax burden and potentially receive a refund if they paid below the specified cap.
Steps to Obtain the Income Tax Rebate
Getting the income tax rebate is a hassle-free process. The revenue department has confirmed that qualifying taxpayers will receive the rebates automatically. There’s no need to submit any additional forms or applications. The department will disburse the rebates either through electronic deposits directly into your bank account or via mail, using the account or address details provided in your most recent tax return.
Starting from July, the department will begin issuing the income tax rebates, and they are obligated to complete all rebate distributions by December 31st, as mandated by law.
To keep track of your income tax rebate status, you can utilize the department’s convenient “Where’s My Rebate?” web tool, allowing you to stay updated on the progress of your rebate. This way, you can easily ensure that you receive the deserved rebate without any complications.
Procedures for Property Tax Payments and Rebates
For homes with mortgages, regular payments are commonly managed through banks. However, property tax payments follow a different process, requiring payment directly to county treasurers twice a year. These payments are typically due in November and May.
Regarding the applicable rebates, the department has clarified that the 2022 rebate will be relevant to property tax payments made in both November 2022 and May 2023. Similarly, the 2023 rebate will apply to property tax payments made in November 2023 and May 2024. This means eligible homeowners can benefit from these rebates during those specific payment periods, providing them with potential financial relief for their property tax obligations.
Steps to Secure Property Tax Rebates
To obtain the property tax rebates, you need to apply for them. The process requires taxpayers to submit an application during specific application periods. For the 2022 property tax rebates, you can apply through two methods:
- Online Application: Utilize the department’s TransAction Portal to apply conveniently onli ne.
- Paper Application: Alternatively, you have the option to submit a paper form.
The application period for the 2022 property tax rebates will be open from August 15, 2023, until October 1, 2023. Likewise, for the 2023 property tax rebates, there will be a second application period available during the same dates in 2024. To ensure you receive the property tax rebates you qualify for, be sure to apply within the designated application periods through the available online portal or by submitting the necessary forms on time.
If you’re seeking information about the amount you paid in 2021 state income taxes and don’t remember the exact figure, you can find that number in your old tax filings. The department specifies that the income tax amount used for calculating rebates can be located on line 20 of its 2021 Montana Individual Income Tax Return form. Refer to this line on your tax return, and you should be able to retrieve the necessary information for the rebate calculations.
All resident taxpayers, regardless of whether they own or rent their homes, qualify for the income tax rebates. However, the property tax rebates are exclusively available to homeowners, specifically for taxes paid on their primary residence.
In some cases, landlords may allocate a portion of renters’ housing payments to cover property taxes on rental properties. Nevertheless, the Legislature has not extended the property tax rebates to homes that are not owner-occupied. Therefore, only homeowners are eligible to claim property tax rebates under this program.
Process Overview for Tax Rebate Credits
The credit for the implementation of tax rebates can be attributed to a combination of efforts from various stakeholders within the government. Initially, Governor Gianforte proposed a budget plan that solely included property tax rebates alongside forward-looking income tax rate cuts. However, through negotiations with legislative Republicans, he eventually showed his support for a combination of smaller property tax rebates and income tax rebates.
During the legislative process, Democrats expressed their belief in the need for some form of tax relief during the 2023 Legislature. Nevertheless, the bills for income and property tax rebates, namely House Bill 192 and House Bill 222, were passed with support primarily from Republicans, with Democrats raising concerns about potential underfunding of other crucial budget priorities. They also made unsuccessful attempts to include renters in the property tax relief bill.
Towards the end of the session, a subsequent bill, House Bill 816, secured additional funding for tax rebates and received support from the majority of Republicans, along with a few Democrats. Ultimately, the credit for the tax rebate initiative is a subjective matter, and we leave it to your own judgment to assess the contributions of various parties involved in this process.
The occurrence of tax rebates in 2025 will depend on the decisions made by the 2025 Legislature. However, it is not very likely. The surplus experienced in 2023 was a result of unique factors such as pandemic-era economic stimulus, inflation, and migration that significantly increased income tax collections. This combination of circumstances was likely a once-in-a-generation situation, making it improbable for similar conditions to repeat in the near future. Therefore, while it remains uncertain, the chances of seeing tax rebates in 2025 are relatively low given the extraordinary circumstances that contributed to the surplus in 2023.