Schedule II: Schedule II – Tax on Montana Source Income (2025)
Montana · Montana DOR · Used for tax years 2025
Montana Form 2 Schedule II calculates tax on Montana source income for 2025. It reports Montana source ordinary income and net long-term capital gains and uses separate income ratios to calculate the tax on each.
Who files this form
The form says to complete the mixed residency section if one spouse was a Montana resident at any point during the tax year and the other spouse was a nonresident or part-year resident.
The supplied text does not state the general rules for who must file Schedule II.
What you'll need
Have these forms, figures, and details ready to complete Schedule II:
- Federal Form 1040: Line 9 is used on Schedule II, line 16a.
- Montana Form 2, page 2: You need the net long-term capital gains from line 2, the capital gains tax from line 11, and the ordinary income tax from line 12.
- Montana source income figures: The schedule asks for income, losses, applicable additional expenses, adjustments, and additions by category, plus Montana source net long-term capital gains.
- Residency details, if applicable: The date your residency changed and the states you moved to and from.
- Identification details: Your name and Social Security number, plus both spouses’ Social Security numbers for the mixed residency section.
Common mistakes
- Entering a ratio above the allowed maximum: Lines 17 and 22 both say not to enter more than 1.000000.
- Using the wrong precision: Both ratios must be rounded to 6 decimal places.
Questions people ask
What is Montana source ordinary income?
The form defines it as all income that is not considered a net long-term capital gain. Add lines 1 through 14 to calculate the amount on line 15.
How do I calculate everywhere ordinary income?
Start with federal Form 1040, line 9, on line 16a. Subtract certain federal adjustments on line 16b and net long-term capital gains on line 16c. The result goes on line 16. The form refers to instructions for the adjustments, but those instructions were not supplied.
How is Montana source ordinary income tax calculated?
Divide line 15 by line 16 to calculate the ratio on line 17. Round to 6 decimal places and do not enter more than 1.000000. Then multiply the Montana ordinary income tax on line 18 by that ratio to get line 19.
Where does the total tax from Schedule II go?
Add the ordinary income tax on line 19 and the net long-term capital gains tax on line 24. Enter the total on Schedule II, line 25, and on Form 2, page 1, line 8.