Will You Be Taxed on Your Montana Tax Rebate? The Answer

Montanans are one step closer to getting a major tax rebate on both their income taxes and on their property taxes. How much will it be? When could they get it? Will we be taxed on the tax rebate? Here's what we found out so far.

First, here are the general details on two major tax relief bills that are now on their way to Governor Greg Gianforte's (R-MT) desk after clearing the Montana Legislature Wednesday night. (Info from Montana State Senate Communications Director Kyle Schmauch)

HB 192 Rep. Bill Mercer, R-Billings

Provides one-time-only income tax rebates to Montanans from the state’s budget surplus. Individuals will receive up to a $1,250 tax rebate, joint filers will receive up to $2,500. The exact rebate received by an individual depends on the amount of taxes they paid in the first place, and no one will receive more in rebates than they paid in income taxes. 

Total financial relief: about $480 million (OTO).

HB 222 Rep. Tom Welch, R-Dillon

Provides tax rebates to property taxes paid on principal residences from the state’s budget surplus. Each household that is a primary residence will receive two $500 rebates over the next two years, for a total of $1,000 per household in one-time-only tax rebates. HB 222 does not provide any rebates to second homes, commercial properties like short-term or long-term rentals, or out-of-state property owners.

Total financial relief: about $284 million (OTO).

We talked about the tax relief bills with Governor Gianforte on Wednesday. After our conversation, one caller in Billings asked if Montanans would be taxed on the tax rebates mentioned above.

Based off of information I received from Rep. Bill Mercer (R-Billings) we have great news for you. According to the information from Rep. Mercer and Rep. Carl Glimm (R-Kalispell), "the rebates are not taxable under state law." So, at least when it comes to state taxes- you will NOT be taxed on the tax rebate checks.

As for when the rebate checks will be available, I am told that the Department of Revenue will have to issue the rebates before the end of 2023. We will keep an eye out for additional info as we spot it.