42.17.304    DETERMINATION OF TAX LIABILITY FOR PRECEDING TAX YEAR; DETERMINATION OF TAX PAID FOR CURRENT TAX YEAR

(1) A taxpayer's tax liability for the preceding tax year is the total tax imposed by Title 15, chapter 30, MCA, less any nonrefundable tax credits allowed under Montana law, as shown on the taxpayer's return.

Example: A taxpayer has a tax, before applying nonrefundable credits, of $5,000. The taxpayer has a nonrefundable energy conservation installation credit of $500. The taxpayer's tax liability for the prior year for estimated tax purposes is $4,500 computed as follows:

 

Tax before nonrefundable credit	$5,000
nonrefundable credits	(    500)
tax liability	$4,500

  

(2) The amount of tax paid for the current year is the sum of the withholding and estimated tax payments plus any refundable credit(s) claimed, as shown on the taxpayer's return.

 

A taxpayer has $800 in Montana withholding, an elderly homeowner/renter credit of $400 and paid $200 in estimated payments. The amount of tax the taxpayer has paid for the current year is $1,400 computed as follows:

 

Montana tax withheld	$  800
Estimated payments	200
Refundable elderly homeowner/renter credit	400
Total taxes paid for the current year	$1,400

 

(3) To determine the preceding tax year liability of an individual who participates in a composite return, the following requirements apply:

(a) For a taxpayer who was a participant in a composite return for the preceding year, the tax liability for the preceding year is the participant's preceding year composite tax liability.

(b) For a taxpayer who filed a Montana individual income tax return for the preceding tax year and for the current year, and participated in a composite return filing, their tax liability for the preceding tax year is their individual liability as determined in (1).

(4) Estimated payments made by a partnership or S corporation with respect to a participant's composite tax liability are not taxes paid by the participant for the current tax year. The rules for filing composite returns are located in ARM Title 42, chapter 9, subchapter 2.

History: 15-30-2620, MCA; IMP, 15-30-2512, MCA; NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2008 MAR p. 65, Eff. 1/18/08; AMD, 2010 MAR p. 177, Eff. 1/15/10.