Written by: Ryan McCarthy
Governor Greg Gianforte signed House Bills 222 and 816 into law in 2023, providing tax relief to eligible taxpayers. In August 2024, the Montana Department of Revenue will begin issuing Property Tax Rebates to qualifying taxpayers. The Property Tax Rebate is a rebate of up to $675 per year of property taxes paid on a principal residence. The rebate is for the tax year of 2023, meaning it is based on the amount of property taxes paid only on your principal residence during the 2023 year.
WHO QUALIFIES?
To qualify you must be a Montana Taxpayer who was billed and paid property taxes on your principal residence, and must have done the following:
- Owned a Montana residence for at least 7 months in 2023;
- Lived in this Montana residence for at least 7 months in 2023;
- Were billed for property taxes, including special assessments and other fees, on this residence; and
- Paid property taxes on this residence.
HOW MUCH IS THE REBATE?
- The rebate is a maximum of $675. If the Taxpayer paid more than $675 in property taxes in 2023, they would receive the full rebate of $675. However, if the taxpayer paid less than $675, they would receive the amount they paid.
- For example, if the taxpayer paid $450 in property taxes on their principal Montana residence in 2023, they would receive a $450 property tax rebate.
- If they paid $1,300 in property taxes on their principal Montana residence in 2023, they would receive a $675 property tax rebate.
WHAT TYPES OF HOMES QUALIFY?
- Single-family homes
- Apartments
- Condominiums
- Trailers
- Manufactured Homes
- Mobile Homes, including up to one acre of surrounding land
WHO CAN CLAIM THE REBATE?
- Individuals
- Deceased individuals (if they lived in and owned the home for at least 7 months prior to death in 2023).
- Grantors of grantor trusts.
- Beneficiaries of revocable living trusts.
WHO IS DISQUALIFIED FROM CLAIMING THE REBATE?
- Homes held in an LLC or Corporation are not eligible for the rebate, even if a member or shareholder lived in the residence for more than 7 months in 2023.
- Estates and Trusts, other than grantor revocable trusts, are not eligible for the rebate.
- Renters do not qualify for the rebate. The taxpayer must have owned the home and lived in the home for at least 7 months.
- Irrevocable trusts.
WHAT IF I MOVED?
You may still qualify for the rebate as long as you:
- Owned and lived in the principal Montana home for seven consecutive months;
- Were billed and paid property taxes on the home; and
- The residence is in Montana.
- If you moved from one Montana principal residence to another Montana principal residence, you may be eligible. For example, if you lived in two different houses, and you paid the Montana property taxes while residing in each residence for a total of at least 7 consecutive months, you are still eligible for the rebate.
WHAT IF MY PARTNER AND I BOTH PAID PROPERTY TAXES?
Only one rebate is allowed per household.
- If you and your partner share the same principal residence and both lived there for at least 7 months in 2023, you will only be eligible for one rebate.
IS THE REBATE TAXED?
- The property tax rebate is not subject to Montana income tax.
- According to the IRS, for most individuals, the property tax rebate will not be included in Federal taxable income.
- If you claim the standard deduction (which most individuals and married couples do), the rebate will not be included in your taxable income.
- However, if you itemize deductions and deduct your Montana state taxes paid for federal income tax purposes, you generally will be required to include the property tax rebate as gross income on your Federal income tax return.
HOW DO I CLAIM THE REBATE?
The Montana Department of Revenue will begin accepting claims for the rebate for Tax Year 2023 on Thursday, August 15, 2024, and all claims MUST be filed by October 1, 2024. If you fail to make a claim by October 1, the Montana Department of Revenue will not accept the claim.
- Visit the Montana Department of Revenue website https://tap.dor.mt.gov/_/ starting August 15 and they will process the claim more promptly if you file online.
- If you are unable to file online, a paper form will be available on our website and in our local field offices starting August 15.
- Paper claims must be postmarked by October 1, 2024.
WHAT DO I NEED TO FILE MY CLAIM?
The law requires you to provide the following information:
- The names and social security numbers of you, your spouse, and your dependents;
- The geocode of your principal residence in 2023, can be found on Montana Cadastral at cadastral.mt.gov or on your property tax bill;
- The amount of property taxes you paid as reflected on your 2023 principal’s residence property tax bill; and
- The mailing address where you would like your rebate sent.
WHERE CAN I FIND MORE INFORMATION?
The Montana Department of Revenue will post updates and the online application to its website. Please contact the experienced tax attorneys at Worden Thane P.C. with your questions about real property, taxes, estate planning, and more.