Montana Form 2 Tax Return Instructions
Gain clarity on Montana's state income tax process. This resource provides a comprehensive overview for correctly completing and filing your Form 2 return.
Montana Form 2 is the state’s individual income tax return. You must file this form if you are a Montana resident required to file a federal income tax return. This requirement also extends to nonresidents who have earned income from Montana sources and part-year residents. Even if not required to file, you may want to do so if Montana income tax was withheld from your pay, as you could be due a refund.
Information and Documents Needed to File
To complete your Montana tax return, you will need personal information for yourself, your spouse, and any dependents, including full names, dates of birth, and Social Security numbers. A complete copy of your federal tax return, such as Form 1040, is also needed, as many calculations on Form 2 begin with figures from your federal return.
You will also need all income statements for the year, which may include:
- Form W-2 from each employer
- Form 1099-G for unemployment compensation
- Form 1099-INT for interest income
- Form 1099-DIV for dividends
- Form 1099-R for distributions from pensions or retirement plans
- Other 1099 forms reporting miscellaneous income
Collect any records that support Montana-specific adjustments or credits you plan to claim. The current year’s Form 2, its schedules, and the instruction booklet can be downloaded from the Montana Department of Revenue’s website.
Step-by-Step Guide to Completing Form 2
Begin by entering your name, Social Security number, and address, and selecting your filing status. Your filing status and the dependents you list must be the same as those on your federal income tax return.
Next, report your income by transferring wages, interest, dividends, and other earnings from your federal forms and W-2s to the corresponding lines on Form 2. The return involves state-specific adjustments, which are detailed on Schedule I. These adjustments include additions, such as interest from non-Montana municipal bonds, and subtractions for items like U.S. government bond interest.
After calculating your Montana adjusted gross income, you must decide whether to take the standard deduction or to itemize. You should calculate your deductions both ways to determine which method provides a greater tax benefit. If you itemize, you will detail expenses like medical costs, certain taxes paid, and charitable contributions.
Use the tax tables in the instruction booklet to find the tax you owe based on your taxable income. After this, account for any tax credits you are eligible to claim on Schedule III. These credits, such as those for contributions to university foundations or the Elderly Homeowner/Renter Credit, reduce your tax liability on a dollar-for-dollar basis.
The final steps involve tallying your payments and calculating your refund or amount due. Report any Montana income tax withheld from your wages and any estimated tax payments made during the year. If your total payments exceed your tax liability, you have an overpayment that can be refunded or applied to next year’s taxes. If you owe additional tax, the form provides payment instructions.
Assembling and Submitting Your Tax Return
For paper filing, your completed Form 2 should be the first document in the packet. Attach any applicable Montana schedules you filled out, but do not include blank schedules. Following the Montana forms, include a complete copy of your federal income tax return.
Attach your state copies of Form W-2 and any other income statements that show Montana tax withholding, such as Form 1099-R, to the front of your return. You may need to include other supporting documents for specific deductions or credits as outlined in the instructions.
The Department of Revenue provides different mailing addresses depending on whether you are due a refund or owe a payment, which are listed in the instruction booklet. Electronic filing is also available through approved software vendors and is encouraged by the department for faster, more secure processing. If you have a balance due, you can pay online through the department’s portal or include a check or money order with your mailed return.
Post-Filing Procedures
After submitting your return, you can check the status of your refund using the “Where’s My Refund?” tool on the Montana Department of Revenue website. You will need your Social Security number and the exact refund amount from your return. E-filed returns are processed faster than paper returns, leading to quicker refunds.
If you receive a notice from the Department of Revenue, respond promptly. The letter will provide specific instructions on what is needed and a deadline for your response. These notices can range from requests for missing information to notifications of adjustments made to your return.
If you discover an error after filing, you must file an amended return. To do this, use the current year’s Form 2 and attach Schedule V, which is for amended return information. On this schedule, you will explain the reason for the change and show the calculation of the corrected tax. Filing an amended return may result in an additional refund or an additional tax liability.