Montana Fiduciary — Estate and Trust Filing Requirements

# Montana Estate and Trust Income Tax Filing Requirements

Beginning with Tax Year 2024, resident estates and trusts (see below) must file a Montana Income Tax Return for Estates and Trusts (Form FID-3) if they have a federal filing requirement or have positive Montana taxable income after considering any Montana additions to federal taxable income. Nonresident estates and trusts must file a Montana FID-3 if they have any Montana source income or Montana resident beneficiaries.

The estate or trust's fiduciary must:

File the return, and

Provide each beneficiary with a Montana Schedule K-1 (FID-3) .

The beneficiaries report this income on their Montana Individual Income Tax return .

Due Dates

Calendar Year: April 15

Fiscal Year: The 15th Day of the 4th month following the tax year end

Example: If your fiscal year ends on June 30, your payment is due on October 15.

If a due date falls on a weekend or holiday, it is due on the next business day.

Extension Deadlines

An estate or trust receives an automatic six-month filing extension. There is no need to apply for an extension to receive a Montana extension.

Extension returns are due:

Calendar Year: October 15

Fiscal Year: The 15th Day of the 10th month following the end of its tax year

Example: If your fiscal year ends on June 30, your payment is due on April 15.

If the extended due date falls on a weekend, it is due on the next business day.

Extension deadlines are for returns only.

Any tax liability must still be paid by the original due date or it will be subject to penalties and interest .

Filing and Payment Options

You may file your estate or trust's income tax return:

With approved software

Using the Montana Income Tax Return for Estates and Trusts (Form FID-3)

You may pay your estate or trust's income tax:

In TransAction Portal (TAP )

With approved software

By making an ACH Credit Payment

Along with your return, or

Using the Montana Estate or Trust Tax Payment Voucher - Form FID (PDF )

Estate or Trust Residency

Resident Estate

An estate is a resident estate if the decedent was a Montana resident on the date of his or her death.

This includes bankruptcy estates.

Resident Trust

Several factors determine a trust's residency, including:

Where the trust's creator lives,

Where the trust's property is located,

Where the trustee lives, and

Where the trust is administered.

Examples of resident trusts include:

Trusts administered in Montana or by a Montana resident or business

Any irrevocable trust with at least one beneficiary in Montana and:

Was created by a Montana resident, or

Comprises property from a Montana resident.

Any trust created from a Montana resident who has passed away if:

Property was transferred to an irrevocable inter vivos because of the death;

The deceased was a Montana resident when he or she died; and

The trust has at least one Montana resident beneficiary.

More information about trust residency can be found in ARM 42.30.101 .

Nonresident Estate or Trust

All other estates or trusts are nonresident estates or trusts.

A nonresident estate or trust calculates taxes the same as a resident estate or trust, multiplied by the percentage of Montana source income.

A nonresident estate or trust reports Montana source income the same as a nonresident individual taxpayer.

Special Filing Requirements

Common Trust Funds

A common trust fund maintained by a bank files federal Form 1065, U.S. Return of Partnership Income.

For Montana purposes, the fund would file a Montana Pass-Through Entity Information and Composite Tax Return (Form PTE) .

Decedent's Estate

Do not use a decedent's social security number for an estate.

If the Federal Employer Identification Number (FEIN) is not available at the time of filing, enter "applied for" and the application date in the box provided.

Exempt Trusts

Exempt trusts filing federal Form 990-T, Exempt Organization Business Income Tax Return to report unrelated business income must file a Montana Corporation Income Tax Return (Form CIT) and pay any applicable tax to Montana.

Grantor Type Trusts

Fiduciaries of grantor trusts are required to file informational tax returns and send copies to the grantors/owners required to report the income, deductions, and credits on their Montana income tax return.

If the entire trust is a grantor trust, complete only the heading portion of the Form FID-3 and mark the "Grantor Type Trust" box. Do not show any dollar amounts, including any withholding amounts and estimated payments, on the form itself. Attach a statement showing these amounts and include a complete copy of federal Form 1041.

If only part of the trust is treated as a grantor type trust, report on Form FID-3 only the part of the income, deductions, etc. not attributable to the grantor type trust.

Pooled Income Funds

A fiduciary files federal Form 5227, Split-Interest Trust Information Return along with a statement to support the following:

The calculation of the yearly rate of return,

The computation of the deduction for distributions to the beneficiaries, and

The computation of any charitable deduction.

Complete only the heading portion of Form FID-3 and mark the "Pooled Income Fund" box. Do not show any dollar amounts on the form itself . Show the dollar amounts only on the supporting statement. Include the supporting statement and a complete copy of federal Form 5227, Split-Interest Trust Information Return with the Form FID-3.

Qualified Funeral Trusts (QFT)

Pre-need funeral trusts can elect to file the return and pay the tax for qualified funeral trusts.

A fiduciary files federal Form 1041-QFT, U.S. Income Tax Return for Qualified Funeral Trusts .

A fiduciary of more than one qualified funeral trust may file the Montana Income Tax Return for Estates and Trusts (Form FID-3) listing all qualified funeral trusts included on the composite federal return, rather than a separate return for each trust.

Taxes due are based on the combined income for all included QFTs, minus a $2,960 exemption.

Qualified or Designated Settlement Funds

These funds file a Montana Corporation Income Tax Return (Form CIT) in Montana.

Qualified Subchapter S Trust (QSST)

A QSST follows the rules for grantor trusts.

Any income from S corporation stock is treated as owned by the beneficiary.

Section 645 Election

A section 645 election lets a qualified revocable trust to be treated as part of the estate during the election period.

An election made at the federal level also applies for Montana.

Split-Interest Trusts

Complete only the heading portion of the Montana Income Tax Return for Estates and Trusts (Form FID-3) and mark the "Other" box.

Do not show any dollar amounts on the Form FID-3. Show dollar amounts only on the supporting statement.

Include the supporting statement and a complete copy of the federal Form 5227, Split-Interest Trust Information Return .