• Health Insurance Paid by S. Corporations - If you are a shareholder, you are allowed to deduct health insurance premiums paid on your behalf by an S. corporation if the cost of the premiums are included in your federal adjusted income.
• Tip Income is excludable if it is included in your federal adjusted gross income, and received for services to patrons of a licensed business that provides food, beverages or lodging.
• Deduction for Purchase of Recycled Material - You may take an additional 10% deduction of the expenses related to the purchase of recycled products used within Montana in your business if the recycled products purchased contain at least 90% reclaimed material.
• Wages Covered by Federal Targeted Jobs Credit - As an employer, you can deduct wages and salaries reduced by the amount of the federal targeted jobs credit or by work incentive program credits. Deduct the credit amount(s) from your Montana adjusted gross income. The deduction must be taken in the year the wages and salaries are used to compute the federal credit.
• Land Sales to Beginning Farmers - You can deduct from your taxable income the income or capital gain realized from the sale of land consisting of 80 acres or more sold to a beginning farmer at a maximum of 9% interest. The transaction must first be approved by the Agricultural Loan Authority. The maximum deduction allowed is $50,000. A copy of your letter of approval from the Department of Agriculture must be retained.
• Passive Loss Carryover - You may be allowed to claim prior year disallowed passive activity losses if you have current year passive activity income or if you sell or exchange your entire interest in the activity in a fully taxable transaction to an unrelated party. Previously disallowed losses may also be claimed in the current tax year if you file a joint return.
• Native American Income - If you are a Native American living and working within the exterior boundaries of your reservation and are an enrolled tribal member, your income earned within the boundaries of your reservation is not taxable in Montana. If you reside and work outside the boundaries of your reservation, your income earned is taxable in Montana. You cannot offset your taxable income with losses generated on your reservation. You are required to file a Montana income tax return even though your income may not be taxable if you meet the filing requirements. **Retain Form IND, Certification of Enrollment including proof your income was earned on your reservation.
• Exempt Military Pay - If you received military wages for serving on active duty under the authority of USC title 10 in the regular armed forces this income is exempt from Montana taxation. Pay earned as a result of service performed under USC Title 10 not in active duty status in the regular armed forces or under any other authority is subject to Montana tax. Separation pay and early out incentive payments are not wages and are fully taxable.

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