Working Military Retirement Exemption - Form WMRE
The Working Military Retirement and Survivor Benefit Exemption (Form WMRE) allows eligible military retirees and survivors in Montana to exempt a portion of their military retirement or survivor benefits from state taxable income. This exemption is administered by the Montana Department of Revenue and must be claimed using Form WMRE, which is attached to the Montana Individual Income Tax Form (Form 2).
Eligibility Requirements
- Military Retirees: Must have received retirement income for service in the U.S. Armed Forces, Army National Guard, Air National Guard, or U.S. Reserve Component.
- Survivor Beneficiaries: Must receive benefits under the U.S. Department of Defense’s Survivor Benefit Plan (SBP).
- Residency: Must have become a Montana resident after June 30, 2023, or were residents before July 1, 2023, and began receiving benefits while a resident.
- Exemption Duration: Available for five consecutive years after meeting eligibility. For those who were residents before July 1, 2023, the exemption applies from tax year 2024 to 2028.
Exemption Calculation
- Military Retiree Exemption: The exemption is the lesser of:
- 50% of the taxpayer’s military retirement income (reported on Form 1099-R, box 2a, code 7), or
- The total Montana source income (wages, business income, farming income, partnership/S-corp income).
- Survivor Benefit Exemption: 50% of the taxable survivor benefits received from DFAS (reported on Form 1099-R, box 2a, code 7).
Important Notes
- Death benefits (Form 1099-R, box 7 code 4) do not qualify for this exemption.
- The exemption is not available to those who became residents before July 1, 2023, and began receiving benefits before residency.
- If filing jointly and both spouses qualify, only one Form WMRE is required.
- Must attach Form WMRE to Form 2 (Montana Individual Income Tax Form) to claim the exemption.
How to Complete Form WMRE
- Enter taxpayer name and Social Security Number (SSN).
- Select the appropriate box: “Military Retiree” or “Beneficiary Receiving Military Survivor Benefits.”
- Complete Part II (for retirees) or Part III (for survivors) as applicable.
- Enter income details from Form 1040 and Form 1099-R as instructed.
Source:
Montana Working Military Retirement and Survivor Benefit Exemption (Form WMRE)
Disclaimer: Always verify details with official Federal or State Department of Revenue Forms and Instructions.