Bill > HB132

This bill modifies Montana's individual income tax law by creating a new tax deduction for interest income reported on IRS Form 1099. Specifically, the bill allows individual taxpayers to subtract a portion of their interest earnings from their taxable income, with different limits based on filing status: single filers and heads of household can deduct up to $2,500, while married couples filing jointly can deduct up to $5,000. The deduction applies only to interest income reported on Form 1099 and is set to take effect for income tax years beginning after December 31, 2025. This means that taxpayers will be able to claim this new deduction when they file their 2026 tax returns. The provision is designed to provide some tax relief for individuals earning interest income, potentially making savings and investment more attractive by reducing the tax burden on interest earnings. The bill includes a sunset provision, indicating that this particular tax provision will terminate on June 30, 2025, which suggests the legislature may review or reconsider the deduction at that time.

Budget and Finance

https://bills.legmt.gov/#/laws/bill/2/LC2572