How to make the state pay 

During its May special session, the Montana Legislature approved a one-time tax rebate of $400 for Montana homeowners proposed by Gov. Brian Schweitzer.

Great. Everyone likes money. But unlike the famous Bush administration rebate of 2001, this rebate is not an automatic process, which raises the question: How do I get paid?

The reason the process is not so simple is the manner in which Montana property taxes are collected. The law specifies that only primary residences in which the owner lived for at least seven months during 2006 are eligible for the rebate, and according to Montana Department of Revenue (DOR) Director Dan Bucks, the state has no way of distinguishing a primary residence from a vacation home by looking at property tax returns.

So homeowners will have to apply for the rebate between “the end of August” and Dec. 31. The DOR plans to send out approximately 300,000 applications, and is assuming about 250,000 households actually qualify for the rebate and will apply. Applications will also be available at libraries and courthouses and online at http://mt.gov/revenue in late August.

“People can speed along their refund if they file online,” Bucks says. He advises property owners to consult the application forms they’re sent nonetheless, because the DOR is filling out some of the information before mailing them out.

Bucks says if an owner paid less than $400 in property taxes in 2006, he or she could include the sum of their returns from 2004 and 2005. Anyone who paid $400 or more in property taxes in 2006 is eligible, and no one can get more than $400 because only one property can be claimed.

Another fun rebate fact worth knowing is that those who filed itemized tax returns for 2006 will have to count the rebate as taxable income on their 2007 returns, while people who filed with a standard deduction will not.

According to H & R Block District Tax Specialist Nancy Eik, that’s because itemized returns allow for larger deductions, so “you already got a deduction for the $400 last year.”

Bucks says rebate checks should start arriving in September.
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