Montana Part-Year Resident Taxable Income Doesn't Make Sense to Me

[sampatg]

I have looked through the MT state tax return instructions, searched through the forums, and seen a lot of posts related to Montana using the federal taxable income as the base for calculating the Montana taxable income, but I am still confused. 

Last year I lived in Colorado until the fall of 2023, when I moved to Montana. I inputted all of the information related to this move into TurboTax. When doing the state return, it asked me to input my source income for the months I lived in Montana, so that it could calculate my part-year resident ratio. I did all of that, but when I got to the Montana Tax Return Summary, my Montana Taxable Income still reflected my federal income. It was the Montana adjusted income (total federal income minus restaurant tips I made in Colorado) minus standard deductions and personal exemptions. This amount was still well above the total income I made while living in Montana. 

Is anyone able to explain why this would be? Is this a bug/problem with TurboTax, or does the Montana Taxable Income shown on the Montana Tax Return Summary not reflect the actual taxed amount that comes from the source income and part-year resident ratio?

I saw some people mention the Credit for Income Tax Paid to Another State or Country Schedule. Should I be filling this section out and put my total Colorado income in there?

[sarareddy]

Montana Part-Year Resident Taxable Income Doesn’t Make Sense to Me either. Cheers! 

[AmyC]

Montana calculates a tax liability based on your full income for the year to start the calculation. Then, it prorates it based on your Montana percentage of income. See page 8 for the calculation.

[gyn1]

So, does that mean we are supposed to see this proration to be reflected at the Montana Tax Return Summary? If we are, then there is a problem. Because we don't see that. At the summary page (just before we file), we still see that ratio calculation is not included and Montana -still- calculates my tax liability based on the full year income.

[BillM223]

gyn1

Montana does what a number of states do - calculate your state tax based on federal income, then prorate that tax by the ration of the Montana divided by the federal income. You can see this happening on lines 18-20 on Form 2 Schedule II.

When you refer to  "the Montana Tax Return Summary", may I assume that this is not on a tax form? The important numbers are on the tax forms. 

If you find numbers on the actual tax forms that are incorrect, please let us know.