Multi-state Income Taxes | Companies expanding into Montana

Multi-state Income Taxes | Companies expanding into Montana

Montana is the state to be in if you want your business to thrive. Thanks to its pro-business tax policies and streamlined regulations,  any business can benefit from working in this state. Montana sector leaders work together to ensure that the business climate remains favorable to companies of all sizes, which makes it a favorable business destination to expand into.

Montana offers a favorable environment for business growth due to its pro-business tax policies.

If you have recently expanded your business into this state, or if you’re considering doing so, understanding the cost of apportionment is important to help you accurately report earnings to the IRS and local governments. 

  • S Corporations

    • Filing Requirements
      • Every S corporation that has Montana source income must file a Form CLT-4S, Montana S Corporation and Composite Information Return, on or before the 15th day of the third month following the close of its annual accounting period.
    • Allocation and Apportionment
      • Allocation: Double wtd Sales
      • Market-based apportionment
        • Montana follows the market-based rule in sourcing receipts from performance of services to the state. Receipts from services are sourced to Montana if the taxpayer’s market for the sale is in Montana. A market for a sale of services is considered to be in Montana to the extent the service is delivered to a location in Montana.
  • Partnerships

    • Filing Requirements
        • Every partnership that has Montana source income must file a Form PR-1, Montana Partnership Information and Composite Tax Return, on or before the 15th day of the third month following the close of its annual accounting period.
    • Allocation & apportionment
      • Allocation: Three-factor Formula
      • Uniform Division of Income for Tax Purposes Act
        • Montana follows the Uniform Division of Income for Tax Purposes Act and the three-factor apportionment formula of property, payroll, and receipts.
  • Employees & individual filers

    You must file a Montana Individual Income Tax return if:

    • You were a resident or part-year resident of Montana, or
    • You were a nonresident who received Montana source income, and
    • Your federal gross income, excluding unemployment compensation, meets the Montana filing threshold.

    You should file a return if you had Montana tax withheld from your paycheck or if you pay estimated income tax, even if you aren’t required to file a return.

    Montana Filing thresholds:

    • Married or filing separately  (Under 65): $4,830 
    • Married or filing separately  (65+): $7,410
    • Head of household (Under 65): $9,660
    • Head of household (65+): $7,410
    • Married filing jointly (Under 65): $9,660
    • Married filing jointly (Single spouse over 65: $12,240); (Both spouses over 65: $14,820)

Download our Multi-State Tax Filing Requirements Guide

Understanding Business Climate and Tax Implications of Other States​

Ensuring Accurate Tax Filing

Keeping a handle on these different laws and tax implications might be difficult for your staff members but can be accomplished by outsourcing a CPA. Allow an expert who deals with business structuring, accounting, and taxation regularly set up accounting software to factor in applicable tax laws for each US state.

Fusion CPA recently expanded into new states bringing us firsthand experience and knowledge. We have a team of certified public accountants who are highly skilled in handling multistate taxes. Our team of professionals understands the federal and state laws in various states and jurisdictions.

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This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.

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