The "Montana Child Care Savings Account Act" establishes tax-exempt child care savings accounts to help individuals manage child care expenses. Employees and residents can create these accounts with tax-deductible contributions up to $5,000 annually, or an inflation-adjusted amount thereafter. Earnings on these accounts are tax-exempt if withdrawals are made for eligible child care expenses; however, a 10% penalty applies for withdrawals used for ineligible purposes, which must also be taxed as ordinary income. The bill amends Section 15-30-2120 of the Montana Code Annotated to address penalties for false claims related to these accounts, including fines and potential imprisonment, thereby promoting accountability in fund usage.

Additionally, the bill modifies the Montana income tax code by allowing a subtraction of $5,500 for taxpayers aged 65 and older and permitting partial subtractions for military pensions and retirement income for certain residents. It also introduces provisions for contributions to education savings accounts, allowing taxpayers to reduce their taxable income by up to $3,000 for such contributions. The legislation clarifies its codification within Title 15, chapter 30, and specifies that the provisions will apply to income tax years beginning after December 31, 2025, while setting conditions for military pension subtractions, including residency requirements and a five-year limit on claims. Overall, the bill aims to enhance tax benefits for seniors and military personnel while promoting education savings initiatives.

Statutes affected:
LC Text: 15-30-2120