Tax Incentives, Deductions and Credits for Montana Income Tax Return

Tax season is not a favorite time of year for anyone, however, by knowing information about a few tax incentive programs offered by the state of Montana, Montana residents can save money on their tax liability. The state of Montana’s Revenue Department offers 24 tax incentives for its residents, however, this article will only review those tax incentives that the average Montana resident will be able to use. They apply to charitable contributions, energy conservation, and elderly resident costs of living. If you are a farmer or own a business, you may want to visit the Montana Department of Revenue’s website for information on the other tax incentives (

College Contribution Credit

The first Montana tax incentive is the College Contribution Credit. This credit is not applicable to college expenses incurred by the resident, but instead is a credit for people who make charitable contributions to one of the state’s Universities or private colleges’ general endowment programs. This tax incentive is available to individuals, partnerships, corporations, and small businesses. The total amount that can be deducted from your tax liability will be based on 10% of total amount contributed up to a maximum deduction of $500. To get this credit you must fill out Montana Form CC.

Energy Conservation Installation Credit

With the large fluctuation of fuel prices in 2005, saving energy has become a focal point in most people’s lives. In the state of Montana a credit has been offered to people who install energy saving devices in their home for the past several years. This credit applies to costs that are associated with installing equipment that is intended to reduce wasted energy, that reduce the amount of energy that is dissipated because of faulty or out-dated equipment, or that reduces the amount of energy that is used for a specific task. For example, the costs associated with purchasing and installing a more energy efficient furnace would be considered a qualifying expense, and they could then be deducted according to the outlined rules. The maximum deduction that can be taken with this credit is $500, and the taxpayer will need to file Montana form ENGR-C.

Elderly Care Credit

If you are taking care of an elderly relative then you may be able to deduct up to $5,000 per family member, with a maximum credit of $10,000 for two or more family members that you are caring for. To qualify for this credit you need to be caring for a relative that is 65 years of age or older, and who has been defined as disabled by the Social Security Administration. To claim this credit you will need to fill out the applicable line on your Montana Annual Tax Return form.

Elderly Homeowner/Renters Credit

If you are a Montana Resident who is 62 years old or older, if you make less than $45,000, and if you have lived in the state of Montana for at least nine consecutive months, then you qualify to take the Elderly Homeowner/Renters Credit. This credit is worth up to $1,000 and it will be paid even if you don’t have any state tax liability. This is a great way for Montana Elderly residents to help offset the cost of living in Montana. To claim this credit you will need to fill out Montana form 2EC.

For More Montana Tax Help

If you need more information about these, or other Montana state tax liabilty topics, you should visit the Montana Department of Revenues website at

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