The bill proposes revisions to the taxation of Social Security benefits in Montana by modifying the federal calculation for these benefits on state tax returns. Specifically, it amends Section 15-30-2120 of the Montana Code Annotated to include new provisions for determining the amount of Social Security benefits and tier 1 railroad retirement benefits that must be included in Montana taxable income. The bill establishes specific "base amounts" and "adjusted base amounts" for different filing statuses, which will guide taxpayers in calculating their taxable income. Additionally, it introduces a provision that prevents taxpayers from including more in their Montana taxable income than what was previously included before the new calculation.

The bill also includes a delayed effective date, stating that it will take effect on January 1, 2026, and will apply to tax years beginning after December 31, 2025. This allows taxpayers and the state to prepare for the changes in tax calculations related to Social Security benefits. The revisions aim to provide clarity and fairness in the taxation process for individuals receiving Social Security and railroad retirement benefits in Montana.

Statutes affected:
LC Text: 15-30-2120