The "Montana Child Care Savings Account Act" establishes tax-exempt child care savings accounts to help residents manage child care expenses. The bill allows individuals and employers to contribute up to $5,000 annually, with tax-exempt earnings as long as the funds are used for eligible child care expenses. It also imposes a 10% penalty on withdrawals made for ineligible expenses, which must be reported to the state. Additionally, the bill amends Section 15-30-2120 of the Montana Code Annotated to address the taxation of withdrawals for non-eligible expenses and defines key terms related to the accounts, ensuring clarity in the management of these savings accounts.

Furthermore, the bill modifies the tax code to provide additional subtractions from federal taxable income for specific taxpayer categories, including individuals aged 65 and older and military pensions. It establishes a subtraction of $5,500 for seniors and outlines conditions for partially excluding military pensions and survivor benefits from taxable income. The legislation also offers tax benefits for contributions to education savings accounts, with a maximum reduction of $3,000 per taxpayer. Provisions for annual adjustments based on inflation and specific eligibility criteria for military pension subtractions are included, with the new legal language set to be codified in Title 15, chapter 30, and applicable to income tax years starting after December 31, 2025.

Statutes affected:
LC Text: 15-30-2120