DE: Profit or Loss from a Disregarded Entity Owned by a Nonresident (Form DE) (Revision)

Montana · Montana DOR · Used for tax years 2024, 2025, 2026

Montana form that reports the Montana profit or loss of a disregarded entity owned by a nonresident.

Who files this form

Form DE is used by single-member LLCs and sole proprietorships owned by nonresident individuals, estates, and trusts to report Montana-source business income and payments received from pass-through entities. Eligible nonresidents also use it to calculate the alternative method tax.

  • Complete a separate Form DE for each federal Schedule C reporting Montana-source income.
  • If your business is unitary, file a combined Form DE that apportions all apportionable business income. A business is unitary when its in-state and out-of-state operations depend on or contribute to each other, or are closely allied and cannot operate independently.
  • Single-member LLCs receiving pass-through entity tax credits, pass-through withholding, or mineral royalty withholding from a pass-through entity must complete Part IV and include it with Form 2 or Form FID-3.

What you'll need

Have these records and details available, as applicable:

  • Your federal Schedule C, which generally supplies the business income information for Form DE.
  • Your business name, FEIN, NAICS code, and business address, plus the owner's name and SSN requested on the form.
  • Records of Montana additions and subtractions to business income. The form refers you to the Form 2 or FID-3 instructions for the lists of these adjustments.
  • Montana and everywhere receipts for a multistate business.
  • Montana Schedule K-1 (PTE) forms showing pass-through entity tax credits, pass-through withholding, and mineral royalty withholding.
  • Your Form 2 or Form FID-3 to report the applicable income, tax, or payment totals.

How to file

Use the same business name shown on your federal Schedule C and enter your business FEIN.

  • Business income: Complete Part I using Schedule C amounts and Montana adjustments. If the income is fully sourced to Montana, report Part I, line 6 on Form 2, Schedule II, line 6a.
  • Multistate business: Mark the apportionable income box if Schedule C reports income earned in more than one state. Complete Part II to determine Montana-source income and report the result on Schedule II, line 6a.
  • Alternative method tax: If eligible and choosing this method, skip Parts I and II. Complete Part III, mark the Alternative Method Filer box on Form 2, Schedule II, and report the tax on Form 2, line 8.
  • Pass-through payments: Complete Part IV and include it with Form 2 or Form FID-3. Transfer the credit and withholding totals to the return lines specified in the Part IV instructions.

The text does not provide a mailing address or e-filing directions.

Common mistakes

  • Completing Parts I and II without Schedule C income: Single-member LLCs that do not file federal Schedule C should not use these parts to report business income. Report the income or loss as reported federally on the corresponding Form 2 or FID-3, Schedule II line.
  • Completing Parts I and II when using the alternative method tax: The instructions specifically say not to complete these parts.
  • Exceeding the alternative method limit: Do not enter more than $100,000 in Part III, line 1. Eligibility requires Montana gross receipts of no more than $100,000 for the tax year.
  • Using a different apportionment method without permission: You must ask the department before determining Montana income on another basis. Even with permission, you must complete and submit Form DE with Form 2.

Questions people ask

Who can choose the alternative method tax?

A nonresident whose only Montana activities consist of receipts, whose Montana activities do not include owning or renting real or tangible personal property, and whose Montana gross receipts do not exceed $100,000 during the tax year may elect this method. The tax is 0.5% of Montana gross receipts instead of individual income tax based on net income.

What if my single-member LLC only rents out Montana property?

An individual member reports the Montana-source rental income on Form 2, Schedule II, line 10. An estate or trust member reports it on Form FID-3, Schedule II, line 7.

Which amounts belong in Part IV?

Column C reports pass-through entity tax credits from Montana Schedule K-1 (PTE), Part V, line 1. Column D combines pass-through withholding from Part V, line 3c and mineral royalty withholding from Part V, line 4.

Where can I ask questions?

Call (406) 444-6900. Montana Relay is available at 711 for people with hearing impairments.

Official sources

All versions of DE