Montana Individual Income Tax Forms And Instructions

2006 Montana Individual Income Tax Instructions

Multiply the amount on Form 2M, line 35 by .02 (2%) and

Form 2M, Schedule II – Montana Tax Credits

enter the result on line 24.

We have listed 6 credits that can be used when filing

Line 25 – Subtract line 24 from 22 and enter the result on

Montana Form 2M, however the Montana Legislature has

line 25. This is the amount of your unreimbursed

authorized 28 different income tax credits. See Montana

employee business expenses and other expenses that are

Form 2, Schedule V for a list and description of these 28

deductible in computing your net income.

tax credits that are available. If you are eligible for any of

the other credits not listed below, you will have to file

Line 26 – Political Contributions. When you compute

Montana Form 2 instead of Form 2M.

your net income, you can take a deduction for political

contributions that you made during the year. These

There are three categories of credits available on your

contributions are limited to a total of $100 for yourself and,

Montana individual income tax return.

if married, a total of $100 for your spouse. To qualify for

• Nonrefundable single-year credits. Your

this deduction, your contribution of money has to be made to:

nonrefundable single-year credits can only be used to

• An individual who is a candidate for nomination or

offset your 2006 resident tax after capital gains credit

election to any federal, state, or local public office in a

and cannot reduce your tax liability below zero. The

primary, general or special election;

unused portion of your nonrefundable single-year

credits that exceeded your 2006 income tax liability are

• Any committee, association, or organization set up to

lost and are unable to be used in future years.

campaign for the nomination or election to any federal,

state, or local public office in a primary, general or

• Nonrefundable carryover credit. Your nonrefundable

special election;

carryover credits can be used to offset your 2006

resident tax after capital gains credit. It cannot reduce

• A national committee or a national political party;

your tax liability below zero. Your excess nonrefundable

• A state committee of a national political party; or

carryover credits that were not applied against your

2006 income tax liability can be carried over and used

• A local committee of a national political party.

to offset future year tax liabilities.

Line 27 – Other Miscellaneous Deductions Not

• Refundable credits. Your refundable credits are

Subject to 2% of Montana Adjusted Gross Income.

applied against your income tax liability with any

When you compute your net income, you can take a

unused credit refunded to you.

deduction for other miscellaneous expenses that are not

subject to 2% of your Montana adjusted gross income.

Line 1 – College Contribution Credit. You can claim a

These deductions are the same deductions that are

credit against your income tax liability for contributions

allowed on your federal income tax return. They include a

that you made in 2006 to a general endowment fund of the

deduction for expenses paid in purchasing organic

Montana University System foundations or a private

fertilizer and inorganic fertilizer that is produced as a by-

Montana college, or its foundation. Your credit is equal to

product of mining or industrial operations in Montana.

10% of the contribution that you made with a maximum

Other deductions you may be allowed are per capita

credit allowed of $500.

livestock fees imposed for enforcement of the livestock

In order for you to qualify for this credit, your contribution

laws of the state and for the payment of bounties on wild

has to be made to a Montana college or university that

animals.

offers a baccalaureate degree level education program. In

Line 29 – Itemized Deduction Worksheet. If the

addition to this credit, your contribution may also be

Montana adjusted gross income that you reported on Form

claimed as an itemized deduction on Form 2M, Schedule

2M, line 35 is more than $150,500, your total itemized

I, line 15.

deductions reported on Form 2M, Schedule I, line 28 may

For further instructions on the college contribution credit,

be limited. Complete Form W, Worksheet VI on page 51

and to calculate this credit, see Montana Form CC. When

in your instruction booklet to determine the portion of the

you claim this credit, you will have to attach a copy of

itemized deductions that you reported on Form 2M,

Montana Form CC to your income tax return.

Schedule I, line 28 that are not deductible because you

exceeded the Montana adjusted gross income limitations

Line 2 – Energy Conservation Installation Credit. If you

above.

are a resident of Montana you can claim a credit against

your income tax liability for energy conservation

Line 30 – Allowable Itemized Deductions. The amount

investments that you made to your home or other

of your allowable itemized deductions is the result of

buildings. Your credit is equal to 25% of your expenses for

subtracting line 29, which is the total of your disallowed

a maximum credit of up to $500 for the capital

itemized deduction, from line 28, which is your total

investments you made to your home or another building

itemized deductions. Enter this result on Form 2M, line 37.

for energy conservation purposes or for the installation or

replacement of a hot water heater or household heating or

cooling system. If you are married, your spouse may also

Montana Individual Income Tax Forms And Instructions - 2006 Page 10

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