A Montana tax credit expansion buried in HB831 affects how elderly tenants and small landlords file—and what they owe.
Most Montana property owners don't realize that a provision in HB831 directly changes the tax position of elderly tenants and elderly landlords who occupy their own homes. The change is modest in headline terms but meaningful in cash flow, and it applies retroactively to 2025 tax filings.
Montana's refundable residential property tax credit for elderly homeowners and renters has a new ceiling: $1,400, up from $1,150. That's the maximum credit an eligible elderly person can claim in a single tax year.
At the same time, the income threshold at which the credit begins to phase out has been extended to $50,000 in gross household income. The law also mandates that these phaseout thresholds adjust annually for inflation going forward.
For property managers and small landlords, this matters most when your tenants are elderly and file Montana income tax returns. The higher credit reduces their out-of-pocket tax liability, which can indirectly affect their ability to pay rent or their willingness to stay in a property.
The credit applies to Montana residents age 62 or older who own or rent their primary residence. Eligibility depends on income and property tax paid, but the expanded credit now reaches households earning up to $50,000 gross income—a wider net than before.
For elderly small-business owners who also own or rent their homestead, the change affects their personal tax return, not their business taxes.
HB831 became effective upon passage and approval. The credit increase applies retroactively to income tax years beginning after December 31, 2024—meaning it covers the 2025 tax year and forward.
Elderly tenants and homeowners filing 2025 Montana income tax returns will see the new $1,400 ceiling and extended phaseout range. The inflation adjustment to phaseout thresholds will kick in for subsequent years.
The amendment is found in Section 2 of HB831, which modifies Montana Code Annotated 15-30-2340, subsection (6)(5), on page 4 of the bill.
If you manage properties with elderly tenants, expect some of them to receive larger tax refunds or owe less in state income tax. This can improve their financial position and, in some cases, their willingness to renew leases or maintain the property.
The change is not dramatic enough to reshape your underwriting or tenant screening, but it's worth noting when you're assessing the financial stability of elderly applicants or current tenants. A larger tax credit can be a small cushion in their annual budget.
The annual inflation adjustment to phaseout thresholds means the credit will gradually become available to higher-income elderly households over time, though the $1,400 cap itself does not automatically adjust for inflation—only the income thresholds do.
For elderly landlords who occupy their own rental property, the credit works the same way: a higher maximum claim and a wider income window to qualify.
For a detailed breakdown of HB831 and other 2025 Montana tax law changes affecting real estate, contact your state trade association or tax advisor.