Veterans Alliance is privately owned and operated to serve veterans. We are not affiliated with the Department of Veterans Affairs.

Veterans Alliance — Veterans Alliance
← All Montana benefits
otherstate

Half Your Survivor Benefit Comes Off Montana Income — for Five Years

Montana lets a recipient of military survivor benefits subtract up to 50% of that income from Montana taxable income. It is not a permanent exemption: MCA 15-30-2120(3)(n)(ii) attaches a FIVE-YEAR LIMITATION, and residency conditions apply whose exact terms we could not establish from the sources reviewed. Because this reaches survivors rather than veterans, it sits outside every list a veteran would read, and a surviving spouse filing a Montana return is unlikely to be told about it by anyone.

Verified August 27, 2026

What this benefit is

Montana lets a recipient of military survivor benefits subtract up to 50% of that income from Montana taxable income. It is not a permanent exemption: MCA 15-30-2120(3)(n)(ii) attaches a FIVE-YEAR LIMITATION, and residency conditions apply whose exact terms we could not establish from the sources reviewed. Because this reaches survivors rather than veterans, it sits outside every list a veteran would read, and a surviving spouse filing a Montana return is unlikely to be told about it by anyone.

What it's worth: Up to 50% of military survivor benefits subtracted, for five years

  • Up to 50% of income received as survivor benefits for military service may be subtracted.
  • A FIVE-YEAR LIMITATION applies under MCA 15-30-2120(3)(n)(ii).
  • RESIDENCY CONDITIONS APPLY and their exact terms are NOT ESTABLISHED from the sources reviewed.
  • It reaches the survivor, not the veteran — so it appears on no veteran benefits list.
  • The saving depends on the benefit amount and Montana's rate for the year.
  • Because the five years run regardless, a survivor who does not claim early loses part of it permanently.

Who is entitled to it

  • You may be receiving survivor benefits for military service.
  • Montana sets this subtraction.

Not sure whether that describes you?

Answer a few questions about this benefit specifically — we only ask what this one actually depends on, and we stop as soon as we know.

How to claim it

Deadline: Five-year limitation on the subtraction
  1. 1Claim it on the Montana return for the first year you receive the benefit. The five-year clock does not wait.
  2. 2Ask the Department of Revenue to confirm the residency conditions — they are in the statute and we could not establish their exact terms.
  3. 3Have the award letter for the survivor benefit ready.
  4. 4If you have been receiving the benefit for some years without claiming, ask about amending returns still within the statutory period.
  5. 5Diary the end of the five years so the change to your tax is not a surprise.
Form
Montana individual income tax return
File with
Montana Department of Revenue
Annual
Claimed once a year.
Worth knowingWe could not establish the residency terms the statute attaches. Confirm them with Revenue rather than assuming they match the residency test used elsewhere in Montana law.

Sources

This finder provides an informational match, not a government eligibility determination. The responsible agency decides your application.