Questions & Answers

What life insurance premiums reimbursements for National Guard and Reservist service can I subtract from my Montana income?

If you are a Montana National Guard member or Reservist who is serving on active duty in a contingency operation and you were reimbursed by the U.S. Department of Defense for the life insurance premiums that you paid for benefits under the service members' group life insurance program, you do not have to add the Department of Defense reimbursement when you figure your Montana tax. To the extent this federal reimbursement is taxable to you for federal and Montana income tax purposes, it has already been included in your federal adjusted gross income.

An adjustment to your federal adjusted gross income is needed if you also received a premium reimbursement from the Montana Department of Military Affairs for additional life insurance premiums you paid (up to $17.50 a month). The Montana reimbursement is taxable income for federal income tax purposes but it is exempt for Montana income tax purposes, so you can deduct these reimbursements from your federal adjusted gross income in arriving at your Montana adjusted gross income.

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