Source: https://taxsim.nber.org/historical_state_tax_forms/MT/2016/Form_2_booklet_2016.pdf#page=74
2016 Montana Form 2 booklet, Form 2EC instructions and Gross Household Income Worksheet. Pages 74-75, text extracted with pdftotext 4.00 (Xpdf), reading order.

Page 2EC-1

Instructions for filing Montana Form 2EC

Instructions for Elderly Homeowner/Renter Credit Form 2EC

The Montana Elderly Homeowner/Renter Credit program is a property tax relief program that provides for refundable tax credit of up to $1,000. To claim this credit, you must live in a household where the total revenue of all household members is less than $45,000 for that year, be 62 or older, have lived in Montana for more than nine months during the tax year, and occupied a Montana residence as a renter, owner or lessee for a total of six months or more during the year.
The total amount of income from all household members used to determine your eligibility is called “gross household income.” Gross household income does not always equal the taxable income that individuals report on their Montana income tax return. It may also include income that is normally not taxable. Part II of these instructions provides a list of the income that must be included in gross household income.
You can claim this credit directly on this return if you are not required to file a Montana individual income tax return (Form 2). If you are required to file Form 2, you only need to enter your social security number(s) on the heading of this form and attach it to Form 2.
If either spouse died during the claim year, enter the date of death in the appropriate box. If filing an individual tax return is not required and this claim is for either a deceased individual or a married couple who are both deceased, please include federal Form 1310.
Part I – Qualifications
You need to answer “Yes” to all four statements before you apply for the elderly homeowner/renter credit. Any “No” answer means you are not eligible for the credit.
Even though you may be eligible for the credit after completing Parts II and III of this form, it may be that you are not entitled to receive any credit. Note that only one claim is allowed per household and that married taxpayers who are living apart may qualify for only one credit per year.
Age 62 Test
If you were 62 or older as of December 31, 2016, you can answer “Yes” to this statement. If you are married and both spouses own or rent your residence, only one of you has to meet the age requirement.
Six-Month Test
You can answer “Yes” to this question as long as you have occupied one or more residences as an owner and/or renter for six months or more during the year.
Nine-Month Test
You must have lived in Montana for nine months or more during the year to answer “Yes” to this statement. If you are the personal representative of the estate of an eligible individual who died during the year, you cannot claim this credit if that individual died before October 1, 2016. If you are married filing this claim with your spouse and if your

spouse, who would have been the only eligible individual, dies before October 1, 2016, you are not eligible for this credit. You are eligible only if, as a surviving spouse, you are age 62 or older and you can continue to answer “Yes” to the other statements.
Gross Household Income
If your gross household income was less than $45,000, you can answer “Yes” to this question. Your gross household income includes all income received by all individuals in the household. Use the worksheet on page 2 to calculate your Gross Household Income.
Part II – Gross Household Income
Enter your gross household income on line 1. Your gross household income is all the income received, taxable and nontaxable, by all individuals who live in your household. This includes, but is not limited to, the income of adult children and unrelated individuals living in your household. In addition to federal adjusted gross income, the following are examples of items that are included in gross household income:
●● Inheritances
●● Pension and annuity income (this includes railroad retirement)
●● Disability benefits including, but not limited to, veteran’s disability, SSI payments and workers’ compensation
●● Any capital gains that you excluded from your Montana adjusted gross income, such as the gain from the sale of your primary residence
●● Alimony and support payments
●● Nontaxable strike benefits
●● Cash public assistance and relief - Do not include LIEAP (Low Income Energy Assistance Program) or SNAP (Supplemental Nutrition Assistance Program, formerly known as the Food Stamp Program)
●● Interest on federal, state, county and municipal bonds
●● All social security payments except those paid directly to a nursing home
●● Federal income tax refunds taxable in Montana
●● Federally taxable state tax refunds
●● Elderly homeowner/renter credit allowed
You may have a basis (the amount you invested) in some items above. If applicable, you may reduce the amount received as an item of income by your basis in that item. For example, if you paid $50,000 for the ownership of a primary residence, $50,000 is your basis. If you sell that residence for $80,000, your gross household income only includes the gain of $30,000 ($80,000 sales price minus $50,000 basis).
If you received pension or annuity income or a distribution from a traditional IRA, include the federally taxable amount as shown on your form 1099.
Do not reduce your gross household income by any losses that you included in your federal adjusted gross income.


Instructions for filing Montana Form 2EC

The following Gross Household Income Worksheet can be used to help you calculate your gross household income.

Gross Household Income Worksheet

Income Source (taxable and nontaxable)

Amount

1. Wages, salaries, bonuses, tips, etc.

2. Business, partnership, rent, royalties (do not include losses)

3. Dividends, interest (including interest from federal, state, county and municipal bonds) and capital gains (do not include capital losses)

4. Federally taxable state refunds

5. Federal tax refund taxable in Montana

6. Prior year 2EC refunds

7. Alimony, cash public assistance, unemployment

8. Pension, annuities, IRA distributions, benefits from railroad retirement, public employee’s retirement, veteran’s disability and social security (Do not include social security income paid directly to a nursing home)

9. Income from any source or other household members not included above

10. Add lines 1 through 9; enter the total here and on Form 2EC, line 1. This is your gross household income.

Line 4 – Household Income Reduction Table

If your household income on line 3 is:

At least

But not more than Your multiplier is

$0

$1,999

0.000

$2,000

$2,999

0.006

$3,000

$3,999

0.016

$4,000

$4,999

0.024

$5,000

$5,999

0.028

$6,000

$6,999

0.032

$7,000

$7,999

0.035

$8,000

$8,999

0.039

$9,000

$9,999

0.042

$10,000

$10,999

0.045

$11,000

$11,999

0.048

$12,000 and greater

0.050

Page 2EC-2
Part III – Credit Computation
Enter the physical address of the residence you are basing your claim on if it is different than the mailing address shown on this form or your Form 2. If you had multiple residences during the year, enter the address of the one you occupied the longest. You need to include a copy of your 2016 property tax bill and/or your signed rent receipts when you file Form 2EC. If you are unable to get signed rent receipts, a statement detailing the rent paid during the year signed by your landlord is an acceptable substitute. If you are filing electronically, you do not need to send us your property tax bill or rent receipts. When you file electronically, you represent that you have completed Form 2EC, retained the required documents in your tax records and will provide those documents to us upon request.
Line 6 – Property Tax Billed
Report the amount of taxes, special assessment and fees that were billed on the property tax statement. Do not report the amount of property tax you actually paid.
You are allowed only the property tax billed on your primary residence and up to one acre of land that is associated with this residence. If the one-acre farmstead or primary acre is not separately identified on your tax bill and if your ownership is less than 20 acres, your property tax to be used in the credit calculation is the larger of: total amount of property tax billed multiplied by 80%, or total amount of property tax billed divided by the total acreage.
If your property tax bill is on property that you held in a revocable trust and if you are the grantor(s) and trustee(s) of that property, you can qualify for this credit. If your property taxes are billed to your living trust or life estate, you can qualify for this credit. If the property occupied by you is in a name other than your own, the property taxes billed for that property can qualify as rent only.
Line 7 – Rent Equivalent Paid
Your rent is only the amount of money that you paid to occupy your home. If you live in a health care, long-term care, personal care or residential care facility, the rent allowed is the actual out-of-pocket rent that you paid. If the facility does not provide you with an adequate breakdown between your rent and amenities, your rent is limited to $30 a day and it cannot exceed $10,950 a year.
Note: Do not include rent you pay for an apartment or a
facility that is exempt from property tax because the credit is not allowed in these situations. Verify with your landlord or facility that the property is subject to property taxes beyond assessments such as sewer and garbage fees. You may also contact us for assistance in determining if the property is exempt from property tax. Items that also should not be included as rent equivalent paid on line 7 are as follows (this list is not all inclusive):
●● Mortgage payments
●● Amenities such as meals, housekeeping or nursing care
●● Nursing home costs that are paid directly from social security to the facility
