State & Local Tax Impacts of COVID-19 for Montana

Thoughtware Alert Published: Dec 11, 2020
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Information current as of January 31, 2021.

The SARS-CoV-2 virus and the incidence of COVID-19 are changing life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to Montana

  • The DOR extended individual income tax filing and payments to July 15 in accordance with the new federal filing deadline. The deadline for those making estimated tax payments for the first quarter of 2020 also has been extended to July 15.
    • Montana DOR Notice, March 20, 2020.
  • The video gambling machine tax for the third quarter of the fiscal year 2020 is due on April 15, but Montana will waive/reduce penalties imposed for licensees that remain closed in compliance with the COVID-19 pandemic executive orders.
    • Emergency Montana Admin. Reg. 23-5-610, effective April 2, 2020.
  • Montana has clarified the taxation and deductions for the PPP. The DOR notes that the PPP is a loan at first but becomes a grant if certain requirements are met. To the extent the loans are forgiven under the CARES Act, the amounts aren’t included in gross income and aren’t taxable. Because the PPP is a loan-grant and not a credit, Mont. Code Ann. §15-30-2110(4) doesn’t apply and the business expenses offset by the grant aren’t deductible for Montana tax purposes either.
    • Montana DOR Notice, May 12, 2020.
  • Montana provided guidance on the taxability of financial assistance under the CARES Act, clarifying that 1) the payments received from the Board of Investments (BOI) are taxable to banks and financial institutions that aren’t explicitly exempt; 2) credit unions are tax-exempt; 3) loan deferments or modifications for individual or business borrowers aren’t taxable; 4) the state should issue Form 1099-MISC to entities other than corporations or limited liability companies electing to be taxed as corporations receiving BOI payments; and 5) grant funds from certain programs are included in a grant recipient’s gross income if the recipient is a business.
    • Montana DOR Release, August 13, 2020.
  • The Montana Department of Revenue published guidance regarding the taxability of CARES Act relief provisions. The guidance includes a statement that payments received from the Montana Board of Investments are taxable to banks and financial institutions.
    • Montana DOR Release, August 18, 2020. 
  • Montana announced that COVID-19 business grant income is taxable in the state. Unless otherwise exempted, grant income to businesses is included in federal taxable gross income and therefore included in Montana taxable income. Currently, the IRS hasn’t exempted Montana business grant funds from gross income. Although a grant recipient is required to include the grant in gross income, the recipient can deduct and/or capitalize the business expenses paid for with the grant funds. Grant recipients can expect to receive a Form 1099-G by January 31, 2021, showing the amount of grant funding received.
    • Montana DOR, Tax News You Can Use; January 19, 2021.
  • Montana announced the PPP debt cancellation isn’t taxable for corporate income and individual income tax purposes.
    • Montana DOR, Notice; January 26, 2021.

For more information, reach out to your BKD Trusted Advisor or use the Contact Us form below.

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