Bill > SB93

This bill revises Montana's income tax treatment of military pensions and retirement benefits by expanding and permanently establishing a tax exemption for certain military retirees. Specifically, the bill allows military retirees who either became a Montana resident after June 30, 2023, or who were residents before receiving military retirement income and remained residents afterward, to subtract up to 50% of their military pension or retirement income from their state taxable income. The bill removes the previous 5-year limitation on claiming this exemption and eliminates the statutory sunset provision that would have terminated the exemption in December 2033. The tax subtraction is limited to the lesser of the taxpayer's Montana source wage income or 50% of their military pension income. Additionally, the bill includes a provision for survivor benefits, allowing up to 50% of military service-related survivor benefits to be subtracted from taxable income. The changes will become effective January 1, 2026, and apply to tax years beginning after December 31, 2025, providing a long-term tax benefit for military retirees in Montana.

Budget and Finance

https://bills.legmt.gov/#/laws/bill/2/LC0570