Montana Source additions to Income can't be adjusted for non-Montana Source income

[DfromMT]

I'm using TurboTax Premier 2025 on Windows 11. I checked for updates today.

I'm an Oregon full-time Resident working on Montana Form 2 with the Nonresident Status box checked.

Reference the Montana TurboTax Form 2 Schedule II line 14:

This line is to report additional income from Montana Sources.

TurboTax includes income on Line 14 that is not from Montana Sources, making my taxable income too large.

The Line 14 income is from Oregon state taxes included on Form 1040 Schedule A line 5a.

I have not found a method to limit Line 14 to income sourced only from Montana.

[RogerD1 · Accepted solution]

Montana does require that state taxes not sourced to Montana that were deducted on a Federal return to be added back to income.  This is done on the Schedule I and gets reported as a Montana addition on line 4 of Form 2.

As you said though, this is not Montana source income and should not be included on line 14 of Schedule II.  Here's how to take care of that:

1. From "Your State Returns", click edit for your Montana nonresident return.
2. You can click Continue for several screens until you get to one title "Montana Source Income Additions"
3. The box for Montana source income not already covered will be pre-populated with the same information as the Income Additions.  Since this income addition has already been covered, enter a 0 in the box.
4. Click Continue, then continue answering questions until you get to the state review.

Once you make this change, you should go back to your Oregon return and restart it using these directions:

1. When you get to the "Your State Returns" page, click on File at the left on the black banner, then select Remove State Return from the dropdown.
2. Click on the Oregon return in the pop-up, then click Remove, then Yes on the pop-up window that appears.
3. Click Close on the Remove State pop-up then go back and click Edit for your Oregon return.