The Montana Department of Revenue just announced whether or not the Montana Tax Rebates are taxable on the federal and state level for 2023.
Federal: Yes and No
Yes: For those individuals who itemized their federal deductions and deducted any Montana state taxes paid are generally required to include the Montana state tax rebates in gross income on their federal income tax returns (to the extent they received a federal income tax benefit from the prior federal income tax deductions).
Reference Form 1040 instructions for more information. If you itemized your federal deductions on your 2022 Form 1040, you can download your Form 1099-G after January 31, 2024, at http://get1099.mt.gov/ .
No: Individuals who claimed the standard deduction on their federal return will not pay any federal tax on their rebates.
Montana: No
Neither the income tax rebate or property tax rebate you received is subject to state income tax for Montana. State tax refunds included in federal adjusted gross income, report that amount on Form 2, Subtractions Schedule, line 1.
