State & Local Tax Impacts of COVID-19 for Montana – 2021

Thoughtware Alert Published: May 03, 2021 | Updated: May 05, 2021

Information current as of March 22, 2021.

COVID-19 has changed 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

  • 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.
  • Montana issued a reminder that employees are subject to Montana state income tax on wages paid to them if they resided in the state for any portion of 2020 and provided teleworker services from their Montana homes. This requirement applies to temporary work assignments within the state due to COVID-19, even if the employee normally provides services to an employer based in another state. Every employer residing in Montana and every nonresident employer transacting business in the state must withhold Montana income tax from wages paid to an employee for services rendered in Montana. Montana state nonresident income tax withholding also is required on all wages paid for services provided within the state, unless a reciprocal agreement applies. Absent guidance from the DOR to the contrary, this guidance also applies in 2021.
    • Montana DOR, Website Notice; February 10, 2021.
  • Montana has extended the filing and payment deadline for 2020 individual income tax returns to May 17, 2021. However, deadlines for quarterly estimated payments of 2021 income taxes have not changed.
    • Montana DOR, News Release; March 18, 2021.

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

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