This booklet addresses most tax filing situations. If you have a tax situation not represented in this booklet, see Title 15 of the Montana Code Annotated.
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Under the American Rescue Plan Act of 2021, taxpayers who received unemployment compensation in 2020 and have a Federal Modified Adjustment Gross Income of $150,000 or less can exclude up to $10,200 of unemployment compensation from gross income. On March 12, 2021, the IRS provided guidance on how to report the exclusion of unemployment compensation on the Form 1040. For more information, please visit the IRS website.
Unemployment compensation is never taxable in Montana. As a result:
Enter the amount from Form 1040, Schedule 1, line 8, including the federal exclusion of unemployment compensation.
In addition to other Montana additions reported on this line, enter the total amount of the federal exclusion of your unemployment compensation reported on Schedule 1, line 8. Enter “UCE” in the specification box.
Enter the unemployment compensation from Schedule 1, line 7. Do not subtract the federal exclusion of unemployment compensation from this line.