House Bill No. [insert bill number] proposes significant changes to Montana's income tax laws, specifically targeting military pensions, retirement income, and survivor benefits. The bill introduces an income tax exemption for these benefits received by retired members of the U.S. armed forces, the Montana Army National Guard, the Montana Air National Guard, and reserve components. It also amends the definition of "Montana source income" to exclude military pension or retirement income and survivor benefits from taxable income. Additionally, the bill makes amendments to Sections 15-30-2101 and 15-30-2120 of the Montana Code Annotated, repeals Section 4 of Chapter 650, Laws of 2023, and establishes a delayed effective date for the new provisions.

Moreover, the bill introduces a new subtraction of $5,500 for taxpayers aged 65 and older and modifies the treatment of military pensions and survivor benefits, allowing for their subtraction without previous limitations. It also clarifies the tax treatment of contributions to education savings accounts and achieving a better life experience programs, enabling taxpayers to reduce their taxable income by the lesser of $3,000 or the amount contributed. The effective date for these changes is set for January 1, 2026, applying to tax years beginning after December 31, 2025. Overall, the bill aims to simplify the tax code and provide financial relief to military personnel and seniors.

Statutes affected:
LC Text: 15-30-2101, 15-30-2120
HB0652_1(1): 15-30-2101, 15-30-2120
HB0652_1(2): 15-30-2101, 15-30-2120
HB0652_1(3): 15-30-2101, 15-30-2120
HB0652_1(4): 15-30-2101, 15-30-2120
HB0652_1: 15-30-2101, 15-30-2120