Montana Earned Income Tax Credit (EITC)
The Montana Earned Income Tax Credit (EITC) is a refundable credit designed to support low- to moderate-income working individuals and families. It is calculated based on federal EITC and adjusted for Montana-specific rules.
How to Calculate Montana EITC
- Start with the federal EITC amount reported on Form 1040, line 27.
- Multiply the federal EITC by 10% (0.10) to determine the base Montana credit amount.
- Calculate your Montana earned income (which includes wages, salaries, and other earned income reported on Form 1040, line 7).
- Divide your Montana earned income by your federal earned income used to calculate the federal EITC.
- Multiply the result from step 2 by the ratio from step 4 to determine your final Montana EITC.
Montana EITC is reported on Form 2, page 1, line 15. The credit is calculated using Worksheet A in the Form 2 instructions.
Eligibility and Important Notes
- Montana EITC is available to individuals who qualify for the federal EITC.
- The credit is based on earned income, not investment income or unearned income.
- Part-year residents must use their Montana source earned income for the period they were residents.
Source:
Montana Individual Income Tax Return Form 2 Instructions
Publication 1 - A Guide to Montana Tax Withholding and Estimated Payments
Disclaimer: Always verify details with official Federal or State Department of Revenue Forms and Instructions.