Montana Tax Extension: Everything You Need to Know

If you need extra time to file your Montana state income taxes, you’re in luck.

Montana offers an automatic six-month extension for individual income tax returns.

However, it’s important to remember that this extension is for filing only—it does not extend the deadline to pay taxes owed.

This guide provides an overview of the Montana tax extension process, including deadlines, penalties, and step-by-step instructions to ensure compliance.

Why File a Montana Tax Extension?

Filing a tax extension allows you extra time to prepare an accurate return. This is especially useful if:

• You are waiting on critical tax documents.

• Your tax situation is complex and requires additional attention.

• You’ve already filed a federal tax extension and want to align your deadlines.

It’s crucial to note that while the extension gives you more time to file, any taxes owed must still be paid by the original deadline to avoid penalties and interest.

How to File a Montana Tax Extension

Step-by-Step Guide

Filing a Montana tax extension is straightforward, whether you need an individual or state business tax extension.

1. Determine Your Payment Amount:

   • Calculate your estimated tax liability for 2024.

   • Ensure at least 90% of the liability is paid by April 15, 2024.

2. Submit Form IT Payment Voucher:

   • Complete and submit the Montana Individual Income Tax Payment Voucher (Form IT) by the original due date.

   • Use the correct payment type box (e.g., extension payment) and ensure all details are accurate.

3. Choose Your Payment Method:

   • Online: Use the TransAction Portal (TAP) to pay electronically via e-check (free) or credit/debit card (small fee).

   • By Mail: Mail the completed Form IT along with your payment to: Montana Department of Revenue, P.O. Box 6309, Helena, MT 59604-6309.

4. File Your Return by October 15:

   • Ensure all required forms and documentation are submitted by the extended deadline to avoid additional penalties.

Late Filing and Payment Penalties

Montana imposes penalties for late filing and late payments. These penalties apply whether you’re filing an individual or state business tax extension. Here’s what you need to know:

Late Filing Penalty

• $50 minimum penalty or 5% of the unpaid tax per month, up to a maximum of 25% of the tax due.

• Formula: Months Late (Rounded Up) × 0.05 × Outstanding Balance = Penalty.

Late Payment Penalty

• 0.5% per month on unpaid taxes, up to 12% of the tax liability.

• Certain taxes, like lodging facilities sales and use tax, incur higher penalties at 1.5% per month.

Interest on Unpaid Taxes

• Interest is charged daily on outstanding taxes and underpaid estimated taxes.

• The 2025 annual interest rate is 8% for individual income tax and other taxes, computed daily.

Revenue Insights: Where Do Your Taxes Go?

Montana Revenue Distribution (2024 Fiscal Year)

In FY 2024, Montana's general fund revenue totaled $3.6 billion, with 61.7% coming from individual income tax, followed by 12.9% from property tax and 8.6% from corporate income tax. Additional sources include natural resource taxes (4.8%) and cannabis/liquor taxes (3.3%).

Tax levies were primarily allocated to local schools (30.9%), county spending (27.0%), and statewide general services (20.5%), reflecting Montana's focus on education, local governance, and essential services.

This breakdown ensures transparency in how taxpayer contributions are used to support Montana's priorities.

Montana Department of Revenue Full Biennial Report for FY 2024.

Frequently Asked Questions

What Is Montana Tax Liability?

Montana tax liability refers to the total amount of tax you owe to the state after accounting for any payments, deductions, or credits. This figure is essential when calculating your extension payment to avoid penalties.

Do I Need to File a Form for Montana’s Automatic Extension?

No. Montana provides an automatic six-month extension for individual tax returns. However, you must pay any taxes owed by April 15 to avoid penalties.

Can I Pay My Taxes Electronically?

Yes. Use Montana’s TransAction Portal (TAP) to make electronic payments securely.

What Happens If I Don’t Pay Taxes by April 15?

If you fail to pay at least 90% of your tax liability by the original deadline, you will incur penalties and interest on the unpaid balance.

Are Extensions Available for Disaster-Affected Taxpayers?

Yes. Taxpayers affected by disasters may qualify for special extensions and penalty relief. Contact the Montana Department of Revenue for more details.

How Do I Calculate Interest on Unpaid Taxes?

Interest is calculated using this formula: Daily Interest Rate × Outstanding Balance × Days Late = Interest.

For example, for a $300 balance that’s 133 days late: 0.021918% × $300 × 133 = $8.75

Need Help? Get Personalized Service!

Tax extensions can be tricky. Let us help you comply with Montana and IRS tax extension requirements. Contact IRS Extension today!