Bill > HB148

This bill proposes to eliminate state income tax on Social Security benefits in Montana by making two key changes to existing tax law. First, in the definition section of Montana tax code, the bill removes Social Security benefits from the list of "Montana source income," which means these benefits will no longer be considered taxable income for state tax purposes. Second, the bill adds a new subtraction in the tax calculation section that allows taxpayers to subtract Social Security benefits from their federal taxable income when determining Montana taxable income. This effectively means that Social Security recipients will no longer pay state income tax on these benefits. The bill sets its effective date as January 1, 2026, and will apply to income tax years beginning after December 31, 2025, providing tax relief for seniors and retirees who receive Social Security income. The change aims to reduce the tax burden on retired individuals and make Montana more financially attractive to retirees.

Budget and Finance

https://bills.legmt.gov/#/laws/bill/2/LC1627