House Bill No. [insert bill number] proposes significant amendments to the taxation of Social Security benefits in Montana, aiming to exempt these benefits from state income tax. The bill deletes the previous inclusion of Social Security benefits in the definition of "Montana source income" and introduces a new provision that explicitly states that Social Security benefits received or accrued by residents are not subject to taxation. This change is designed to alleviate the financial burden on residents who depend on Social Security as a primary income source. Additionally, the bill revises the definition of "Montana source income" to ensure that Social Security benefits are excluded, reflecting the proposed exemption.

The legislation also introduces several amendments to the current tax code, particularly regarding deductions and subtractions from federal taxable income. It establishes a new subtraction for Social Security benefits, replacing the previous provision that only included military pensions and retirement income. Furthermore, it allows a $5,500 subtraction for taxpayers aged 65 and older and specifies that contributions to education savings accounts and achieving a better life experience programs can reduce taxable income by up to $3,000. The bill sets an effective date of January 1, 2026, for these changes, applying to income tax years beginning after December 31, 2025, and includes provisions for inflation adjustments and specific conditions for military pension subtractions. Overall, the bill aims to provide targeted tax relief to seniors, military personnel, and individuals contributing to education-related programs.

Statutes affected:
LC Text: 15-30-2101, 15-30-2120
HB0148_1(1): 15-30-2101, 15-30-2120
HB0148_1(2): 15-30-2101, 15-30-2120
HB0148_1(3): 15-30-2101, 15-30-2120
HB0148_1(4): 15-30-2101, 15-30-2120
HB0148_1(5): 15-30-2101, 15-30-2120
HB0148_1(6): 15-30-2101, 15-30-2120
HB0148_1(7): 15-30-2101, 15-30-2120
HB0148_1(8): 15-30-2101, 15-30-2120
HB0148_1(9): 15-30-2101, 15-30-2120
HB0148_1: 15-30-2101, 15-30-2120