Montana

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Summary of Montana Military and Veterans Benefits: Montana offers special benefits for its military Service members and Veterans including Property Tax Exemptions, Montana National Guard Tuition Scholarship Program, Education and Tuition Assistance, Point Preference or Alternative Preference in Initial Hiring, Vehicle Tags, as well as Hunting and Fishing License privileges. Eligibility for some benefits may depend on residency, military component, and Veteran disability status.

Montana Military and Veterans State Benefits Highlights and Eligibility


  What are my Montana Military and Veterans State Tax Benefits?

Montana Retired Military Pay Income Taxes : Montana taxes all pension and retirement income received while residing in Montana to the extent it is taxable on the federal return. The state does allow a pension and annuity income exemption of up to $4,070 per individual, if certain income limitations are met

If you received retirement income other than Tier II Railroad benefits, you should complete state form W, Worksheet IV in order to determine the amount of your exclusion.

Your retirement exclusion is limited to the lesser of your taxable retirement income that you received or $4,700, as long as your federal adjusted gross income is $30,000 or less and you are filing a single return, filing jointly with your Spouse and only one of you have taxable retirement income, or you are filing as head of household. If both you and your Spouse have received retirement income and you are filing jointly with your Spouse, and your federal adjusted gross income is $33,910 or less, you both can exclude the lesser of your taxable retirement income that you receive personally or $4,070 each for a maximum of $8,140.

Learn more about Montana Retired Military Pay Income Taxes

Montana State Taxes on U.S. Department of Veterans Affairs Military Disability Retired Pay: Military Disability Retirement Pay received as a pension, annuity or similar allowance for personal injury or sickness resulting from active service in the Armed Forces should not be included in taxable income if any of the following conditions apply:

  • You were entitled to receive a disability payment before September 25, 1975;

  • You were a member of the military (active or reserves) or were under a binding written commitment to become a member on September 24, 1975;

  • You receive disability payments for a combat-related injury. This is a personal injury or sickness that:

    • Resulted directly from armed conflict,

    • Took place while you were engaged in extra-hazardous service,

    • Took place under conditions simulating, including training exercises such as maneuvers, or

    • Was caused by an instrumentality of war.

  • You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it (the exclusion under this condition equals the amount you would be entitled to from the VA).

Learn more about Montana State Taxes on U.S. Department of Veterans Affairs Military Disability Retired Pay

Montana State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation: Dependency and Indemnity Compensation (DIC) is a tax-free monetary benefit paid to eligible survivors of military Service members who died in the line of duty or eligible survivors of Veterans whose death resulted from a service-related injury or disease.

Learn more about Montana State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation

 Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Montana State Tax Benefits: Generally subject to state taxes for those states with income tax. Check with state department of revenue office

Learn more about Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Montana State Tax Benefits

Montana Military Salary, Veterans' Bonus, Or Death Benefit Exemptions: The State of Montana offers the following income tax exemptions to resident Service members:

Montana Active Duty Pay Income Tax Exemption: The salary received from the Armed Forces by residents of Montana who are serving on active duty in the regular Armed Forces and who entered into active duty from Montana is exempt from state income tax.

Montana National Guard Pay Income Tax Exemption: The salary received by residents of Montana for active duty in the National Guard is exempt from state income tax.

Montana Veterans' Bonus or Death Benefit Income Tax Exemption: All payments made under the World War I bonus law, the Korean bonus law, and the Veterans' bonus law is exempt from taxation. The amount received from the federal government by a Service member, as reimbursement for group life insurance premiums paid is considered to be a bonus and is exempt from taxation. The amount received by a beneficiary is exempt from taxation.

Learn more about Montana Military Salary, Veterans' Bonus, Or Death Benefit Exemptions

 Montana Disabled Veteran or Spouses of Montana Disabled Veterans (MDV) Assistance Program, Property Tax Reduction: ( 15-6-311, MCA ) The Montana Disabled Veterans (MDV) Assistance Program helps disabled Veterans or their unmarried Surviving Spouse by reducing the property tax rate on their home. The Veteran must have 100% disability from an injury related to service. For homes on agricultural or forest land, the benefit applies to the home and one-acre homes site. The MDV reduction is based on income and marriage status as shown on the table below.
Who is eligible for the Montana Disabled Veteran or Spouses of Montana Disabled Veterans (MDV) Assistance Program, Property Tax Reduction? To qualify for MDV, you must:

  • Own or currently be under a contract to purchase a home

  • Live in the home as your primary residence for at least seven months of the year

  • Have a letter from the U.S. Department of Veterans Affairs (VA) showing your current disability status is 100% for a service-connected disability

  • Have a 2017 Federal Adjusted Gross Income (FAGI)—excluding capital income or loss—below the threshold

Income Thresholds:
Single: $52,507
Married or Head of Household: $60,585
Unmarried Surviving Spouse: $45,775

A Surviving Spouse must also have a letter from the VA showing their deceased Spouse

  • Died in active duty, or

  • Died from a disability related to service and was rated 100% disability at the time of their death

If you are a new Montana resident, include a copy of your 2017 federal income tax return with your completed application.

If you are married, include your Spouse’s income in your FAGI regardless of whether they are a co-owner of the home.

If your only income is from social security, Veterans’ benefits and/or other nontaxable sources , include a copy of your social security statement and other income documentation with your completed application.

The following charts show the 2018 income guidelines. Depending on the marital status and income of the homeowner, the tax rate is reduced by 100%, 80%, 70% or 50% of the normal tax rate. The income ranges are updated each year for inflation.

Income

Income

Percentage

Single Person

Married Couple or Head of Household

Reduction

$0 - $40,389

$0 - $48,467

100%

$40,390 - $44,429

$48,468- $52,507

80%

$44,430- $48,467

$52,508- $56,545

70%

$46,468- $52,507

$56,646- $60,585

50%

Income

Percentage

Surviving Spouse

Reduction

$0 - $33,658

100%

$33,659- $37,697

80%

$37,698- $41,736

70%

$41,737- $45,775

50%

To apply for MDV, you must complete the Montana Disabled Veteran Property Tax Relief Application for Tax Year 2019 (Form MDV) and return it to your nearest Department of Revenue field office. Your application must be post marked or hand-delivered by April 15. If you miss the deadline, we will consider your application for the following year.
Montana Department of Revenue Office Directory

Learn more about the Montana Disabled Veteran or Spouses of Montana Disabled Veterans (MDV) Assistance Program, Property Tax Reduction

Montana Veterans' Clubhouse Tax Exemption -- Incompetent Veterans' Trusts: A clubhouse or building erected by or belonging to any society or organization of honorably discharged United States military personnel that is used primarily for educational, fraternal, benevolent, or purely public charitable purposes rather than for gain or profit, together with the personal property necessarily used in the building, is exempt from taxation. The exemption provided for in this section applies even if a business, intended primarily for the use of the members, is required to be open to the public and is operated in a portion of the building.

All property, real or personal, in the possession of legal guardians of incompetent Veterans of U.S. military service or minor dependents of the Veterans, when the property is funded or derived from funds received from the United States as pension, compensation, insurance, adjusted compensation, or gratuity, is exempt from all taxation as property of the United States while held by the guardian, but not after title passes to the Veteran or minor in the minor's own right on account of removal of legal disability. (Montana Code15-6-203)