1. (1) Claiming credit for the tax withheld shall be accomplished as follows:

   1. (a) Credit may be claimed for the tax withheld on a Montana individual income tax return or a Montana corporate income tax return, with a copy of Form 1099-MISC attached, to substantiate the amount claimed.
   2. (b) Taxpayers, excluding pass-through entities, that receive a Montana Schedule K-1 from a pass-through entity, as defined in 15-30-2101, MCA, may claim a refundable credit for the amount shown as their share of the tax withheld from Montana net royalty. Taxpayers that claim such a credit must keep copies of the federal and Montana Schedule K-1(s) in their records.
   3. (c) Pass-through entities must determine the owner's distributive share of mineral royalty withholding in proportion of the owner's share of profit and loss from the pass-through entity.
   4. (d) A pass-through entity must claim the mineral withholding tax paid on its behalf as a refundable credit against pass-through entity tax owed by the entity.
   5. (e) A pass-through entity must claim the mineral withholding tax paid on its behalf as a refundable credit against composite tax owed by the pass-through entity on behalf of an owner in proportion of the owner's distributive share of income or loss.
   6. (f) A pass-through entity may claim mineral royalty withholding tax paid on its behalf as a credit against pass-through withholding tax owed by the entity on behalf of an owner in proportion of the owner's distributive share of profit or loss.
   7. (g) An estate or trust is entitled to credit for the tax withheld in proportion to the amount of royalty income that the estate or trust includes in Montana taxable income. A beneficiary is entitled to a credit for the tax withheld in proportion to the amount of royalty income the beneficiary must report on their Montana individual income tax return.
   8. (h) Any person filing on a fiscal year ending other than December 31, must claim a credit for the withholding tax shown on the personal income tax return required to be filed during the year following the December closing period of the Form RW-3, Montana Mineral Royalty Withholding Tax Reconciliation Return.
   9. (i) Production taxes cannot be claimed as withholding for mineral royalty withholding or as income tax withholding.

Authorizing statute(s): 15-30-2547, MCA

Implementing statute(s): 15-30-2539, 15-30-3312, 15-30-3313, MCA

History: NEW, 2007 MAR p. 2151, Eff. 12/21/07; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2012 MAR p. 2640, Eff. 12/21/12; AMD, 2015 MAR p. 27, Eff. 1/16/15; AMD, 2018 MAR p. 853, Eff. 4/28/18; AMD, 2024 MAR p. 2324, Eff. 9/21/24.