Bill > HB537

This bill establishes a new tax credit for Montana residents when a child is born, providing a maximum refundable credit of $3,000 that is reduced based on the taxpayer's federal adjusted gross income. Specifically, the credit amount is calculated as the lesser of $3,000 or the total of Montana income taxes, federal income taxes, and the taxpayer's employee contributions to Social Security. To claim the credit, taxpayers must include the child's birth details and parents' names on their tax return. The credit is phased out at a rate of $150 for every $1,000 of income above $120,000 for married joint filers or $60,000 for other filing statuses. For married couples filing separately or unmarried parents sharing custody, the maximum credit is limited to $1,500, while the custodial parent can claim the full credit if parents are unmarried and do not share custody. The bill also adds this new birth day tax credit to the list of tax credits that will be periodically reviewed by the revenue interim committee to assess its effectiveness and impact. The tax credit will apply to income tax years beginning after December 31, 2025, giving the state time to implement the new program and prepare for its administration.

Budget and Finance

https://bills.legmt.gov/#/laws/bill/2/LC2021