Multiple bills were passed in last year’s legislative session that will also go into effect for the 2024 tax year. That will definitely simplify taxes,” said Coles. So the rate structure is totally different. You are still going to get treated the same way. “There’s no penalty for filing married filing jointly, but it’s not encouraging you to file separately, by any manner. The number of tax brackets will decrease substantially starting next tax year, from seven to two, and there will be no benefit for those married filing jointly. That’s kind of one of those things that occurs because of the elimination of the adjusted gross income section,” said Coles. “Unemployment that is subject to federal taxation, worker’s compensation if subject to federal taxation, and tips for service industry workers, those items are now taxable. “We had another entire session to tweak anything in SB 399 as the legislative body, and if there were any errors, to fix those or further tweak things,” said Legislative Services Division attorney Jaret Coles.įor the 2024 tax year, which is next filing season, not the current one, several items will no longer be exempt from state taxes. One of the bills with the most sweeping changes is Senate Bill 399 from 2021, and many of its impacts still aren't in effect. Tax season is upon us, and there are numerous changes Montanans should expect in the coming years.Īt a Revenue Committee meeting Monday, state officials reviewed how recently passed state laws will impact income tax filings. And even though inflation has slowed down, those prices are not coming down.HELENA, Mont. But quite frankly, if you’ve been down to your grocery store lately, you know grocery prices have gone up significantly. I know a lot of people are talking about, they think the economy’s good. "So you’ll have a little bit more money to help you just get through life and pay the bills. And what we’re trying to do in Helena is reduce your taxes," Hertz said. I mean, the price of rent, food, and fuel, (those are) major cost contributors to everybody. “A lot of individuals are struggling right now. Hertz argues the changes from SB399 will benefit Montana taxpayers and help them save money. "Which quite honestly, is a lot of money." (That's) probably anywhere (between) $20-80 a pay period," Wahrlich said. If that income was taxed at 5.9%, each taxpayer would have paid $279 more. Around 22,000 Montana taxpayers reported a combined $105.4 million in exempt tipped income in 2021. And those are all taxed,” Wahrlich said.Īccording to Montana Free Press, Montana’s top-bracket tax rate is 5.9%, meaning service workers will owe an additional $5.90 in state taxes for every $100 of tip income they report. "Our servers pay into a tip pool, which then is distributed to all of our non-tipped employees. "But I might have to get another job now that I hear that." "I just love working at Stella’s," Wand said. While the changes won’t be reflected until tax season in 2025 when 2024 taxes are due, service workers like Wand are scrambling to figure out their financial futures. The bill also dropped the top tax rate in Montana down to 6.5%." And those are primarily low-income taxpayers. "The bill does eliminate up to.100,000 individuals who will no longer have to pay taxes in Montana. And those levels were a lot lower in 2023.That’s where a lot of people are going to save on income taxes in Montana with this bill,” Hertz explained. So what that means is, that first 15 or 30,000 dollars of income is not taxable at all in Montana anymore. The federal levels in 2024 will be $15,000 for a single person and $30,000 approximately for a married couple. Senate Bill 399 encompasses a few changes to the system. Taxes should just be broad-based and fair to everybody,” Hertz said. "If you’re working at the same facility and you are an employee who does not get tips, yet the employee next to you is getting tips, that employee is not paying taxes on maybe a half, or a third, of their income. Hertz said it's an attempt at leveling the playing field.
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