House Bill No. [insert bill number] proposes to exempt Social Security benefits from state income tax in Montana by amending the Montana Code Annotated (MCA). The bill deletes the previous inclusion of Social Security benefits in the definition of "Montana source income" and adds a provision that explicitly states these benefits received or accrued by residents are not subject to taxation. This change aims to provide financial relief to residents who depend on Social Security as a primary income source and aligns state tax policy with the goal of supporting retirees.

In addition to the changes regarding Social Security benefits, the bill introduces modifications to the tax code concerning deductions and subtractions from federal taxable income. It adds a new subtraction specifically for Social Security benefits and offers additional tax benefits for individuals aged 65 and older, including a $5,500 subtraction. The bill also outlines provisions for military pensions and retirement income, allowing eligible individuals to subtract a portion of their income. Furthermore, it establishes tax reductions for contributions to education savings accounts, with a maximum reduction of $3,000. The effective date of the act is set for January 1, 2026, applying to income tax years beginning after December 31, 2025.

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