Bill > HB652

This bill eliminates state income taxes on military pensions, retirement income, and survivor benefits for members of the United States armed forces, including the Army and Air National Guard and reserve components. Specifically, the bill modifies existing state tax law to fully exempt all military pension and retirement income, as well as survivor benefits, from state income taxation. Previously, there were restrictions on these exemptions, such as limitations on the amount that could be subtracted from taxable income and requirements about residency status. The new law removes those prior limitations, making the tax exemption comprehensive and unconditional for all military pensions and retirement income. The bill will take effect on January 1, 2026, and will apply to tax years beginning after December 31, 2025, which means military veterans receiving retirement or survivor benefits will see the full tax exemption start with their 2026 tax filings. This change is intended to make Montana more attractive to military veterans and provide financial relief to those who have served in the armed forces.

Budget and Finance

https://bills.legmt.gov/#/laws/bill/2/LC3073