Military Pay
Resident - Active duty military income is excluded from taxation in Montana. To subtract active duty military income in the Montana individual return, from the Montana resident tax return menu select:
- Total Subtractions
- Active Duty Residents Military - Enter the income as a positive number.
Nonresident - If the taxpayer is a nonresident of Montana stationed in Montana whose only source of income is active duty military pay, they are not required to file a Montana return.
One spouse is a resident of Montana and the other is not - A servicemember's spouse may elect, for income tax purposes, to use the same state of residence as the servicemember. If a servicemember is not a Montana resident, and is instead a resident of another state, his or her spouse can elect to also be a resident of that state and not a resident of Montana.
Montana does not require the same filing status as the federal return. To change the filing status on the Montana resident return, select:
- Personal Information
- Filing status
Spouse Income - Military Spouses Residency Relief Act (MSRRA)
The MSRRA allows military spouses who reside with their service member spouse stationed in a nonresident state on military orders to keep their resident state for tax purposes. This means if the spouse has income from the nonresident state, they are not required to pay taxes to the nonresident state but report this income on their resident state return.
In order to be eligible for the income exemption under the MSRRA in Montana , the following conditions must be met by the military spouse/employee:
- Must be the spouse of a nonresident military service member
- Must be in Montana solely to be with military spouse who is serving in compliance with military orders
- Both spouses must be residents of the same state
If the military spouse meets the eligibility requirements, they can avoid Montana state tax from being withheld from their pay by providing their employer with Form MW-4 Employee Withholding Allowance and Exemption Certificate.
To claim a refund of taxes withheld from the Montana income in error, from the Montana nonresident return, select:
- Personal Information
- Other Categories
- Military Spouse under the Residency Relief Act - Select Yes and continue back to the main Montana return.
- Federal Adjusted Gross Income
- Total Income
- Wages - Remove the spouse wages.
Note: This is an article on reporting military pay and military spouse pay in the TaxSlayer Pro program. It is not intended as tax advice.
Additional Information: