Montana Form CIT is the annual corporate income tax return that every C corporation doing business in Montana files with the Department of Revenue. You start from your federal Form 1120, make Montana-specific additions and subtractions, apportion income if you operate in more than one state, and apply the 6.75 percent rate to arrive at tax owed. The minimum tax is $50 even in a loss year, and calendar-year returns are due May 15.
Who Has to File
Any corporation engaged in business in Montana owes the state’s corporate income tax and files Form CIT.1Montana Legislature. Montana Code 15-31-101 – Organizations Subject to Tax That includes corporations incorporated under Montana law, foreign corporations authorized to do business in the state, and out-of-state corporations with nexus through physical presence, employees, or Montana-sourced revenue.
S corporations and pass-through entities do not use Form CIT. They file Form PTE instead. Regulated investment companies follow their own filing path. Form CIT is the C corporation return.
When Form CIT Is Due
Calendar-year corporations file by May 15. Fiscal-year corporations file by the 15th day of the fifth month after the tax year ends.2Montana Department of Revenue. Montana Corporate Income Tax
Montana grants every C corporation an automatic six-month extension to file, and you do not need to submit a form to claim it. For calendar-year filers, that pushes the return deadline to November 15. Read the extension carefully: it covers the return, not the payment. Any tax owed is still due by the original May 15 date, and unpaid balances start accruing penalties and interest from that day.2Montana Department of Revenue. Montana Corporate Income Tax
Tax Rate and the $50 Minimum
Montana has three possible rates.2Montana Department of Revenue. Montana Corporate Income Tax Most C corporations pay the standard 6.75 percent of Montana net income. Multinationals that make a water’s-edge election pay 7 percent. Corporations whose only Montana activity is sales, that own or rent no property in the state, and whose Montana gross sales total $100,000 or less can elect an alternative gross sales tax of 0.5 percent.
Every corporation subject to the tax owes at least $50, regardless of profitability.3Montana Legislature. Montana Code 15-31-121 – Rate of Tax – Minimum Tax On a combined return, each corporation in the group that has Montana activity owes its own $50.4Montana Department of Revenue. 2025 Montana Form CIT Corporate Income Tax Instructions
Completing the Return
Pull the current-year form from the Department of Revenue’s website so the fields and schedules match.5Montana Department of Revenue. Corporate Income Tax Return Form CIT Have your completed federal Form 1120 in hand. You’ll transfer figures from it, and you must attach a signed copy of the federal return, or at least pages 1 through 5 with key supporting schedules, to your Form CIT.4Montana Department of Revenue. 2025 Montana Form CIT Corporate Income Tax Instructions The header collects the corporation’s legal name, FEIN, and tax year dates. The math then moves through three stages: additions, subtractions, and apportionment.
Additions to Federal Income
Montana treats certain income as taxable that the federal return excludes. Under MCA 15-31-113, the common add-back is interest income from bonds issued by other states or their political subdivisions. That interest is generally exempt federally but counts as Montana gross income.6Montana State Legislature. Montana Code 15-31-113 – Gross Income and Net Income State income taxes you deducted federally also get added back, since Montana doesn’t allow a deduction for its own tax.
Subtractions From Federal Income
MCA 15-31-114 lists deductions allowed in computing Montana net income.7Montana Code Annotated. Montana Code 15-31-114 – Deductions Allowed in Computing Income The most common is interest earned on U.S. government obligations, which states can’t tax. Other subtractions rely on separate schedules. Claiming a net operating loss deduction means attaching Schedule NOL. A recycled material deduction requires Form RCYL.
Apportionment for Multistate Corporations
If your corporation operates in more than one state, you don’t pay Montana tax on your entire income. You apportion it. For tax periods beginning after December 31, 2024, Montana uses a single-sales-factor formula: Montana receipts divided by total receipts everywhere. The old three-factor formula (property, payroll, and double-weighted sales) no longer applies. Every multistate filer completes and attaches Schedule K.4Montana Department of Revenue. 2025 Montana Form CIT Corporate Income Tax Instructions
Receipts get assigned to Montana using market-based sourcing rules in Montana’s administrative rules, which set a hierarchy of methods. You apply the primary method for each receipt type, and only move down the hierarchy if the primary method doesn’t fit. After you multiply your Montana-adjusted income by the apportionment factor, apply the tax rate to get your liability.
Water’s-Edge Election
A unitary multinational can limit its Montana filing to U.S. income and income from certain identified tax havens by electing water’s-edge treatment. The rate rises to 7 percent in exchange.2Montana Department of Revenue. Montana Corporate Income Tax
File Form WE-ELECT through the TransAction Portal (TAP) within the first 90 days of the tax year in which the election takes effect. It binds you for three consecutive tax periods. Renewing means filing a fresh Form WE-ELECT within the first 90 days of the next three-year cycle. Revoking mid-cycle takes written permission from the Department of Revenue.8Montana Department of Revenue. 2024 Montana Form CIT Corporate Income Tax Instructions Filers with a valid election also complete Schedule WE.
Combined and Consolidated Returns
Affiliated corporations operating as a unitary business may file a consolidated Montana return, and the Department of Revenue can require one when it considers the consolidated approach necessary to accurately reflect Montana income. Two conditions apply: at least 80 percent of all classes of stock of each corporation must be owned directly or indirectly by one or more group members, and operations must be interrelated enough that a single corporation’s net income can’t reasonably be determined in isolation.9Montana State Legislature. Montana Code 15-31-141 – Consolidated Returns – Computation and Procedure
One shortcut exists. If every corporation in the group operates exclusively in Montana (not multistate) and the group filed a federal consolidated return, consolidated Montana filing is available without separate department permission. Once you elect, the election stays in place as long as you continue filing federally consolidated. When more than one corporation in the group has Montana activity, complete Schedule K-Combined alongside Schedule K.
How to Submit the Return
Montana requires most corporations to file electronically. Any corporation with gross receipts above $750,000 in the tax period must submit Form CIT, the federal return, and related schedules through the TransAction Portal.10Montana Code Annotated. Montana Code 15-31-110 – Electronic Corporate Income Tax Return Required Skipping e-file when it’s mandatory carries the same consequence as not filing at all: the Department applies the late-filing penalty.
Corporations with gross receipts of $750,000 or less are exempt from the e-file mandate and can mail paper returns. The current mailing address is printed in the Form CIT instructions booklet. Either way, the return must be time-stamped or postmarked by the filing deadline.
Estimated Tax Payments
Corporations that expect to owe $5,000 or more in Montana corporate income tax for the year must make quarterly estimated payments.11Montana Code Annotated. Montana Code 15-31-502 – Assessment and Payment of Tax – Estimated Tax Payment For calendar-year filers, installments fall on April 15, June 15, September 15, and December 15. Fiscal-year filers follow the parallel pattern: the 15th day of the 4th, 6th, 9th, and 12th months of the fiscal year.
To avoid underpayment interest, quarterly payments should cover at least 90 percent of the current-year liability or 100 percent of the prior-year liability.12Montana Department of Revenue. Making Estimated Tax Payments If you come up short, use Form CIT-UT to compute underpayment interest and report it with the return.
Penalties and Interest
The late-filing penalty is $50 or 5 percent of the outstanding tax for each month the return is overdue, whichever is greater, capped at 25 percent of the tax due.10Montana Code Annotated. Montana Code 15-31-110 – Electronic Corporate Income Tax Return Required13Montana Department of Revenue. Interest and Penalties The same penalty structure hits corporations that ignore the e-file requirement, because the Department treats the return as unfiled.
Interest on unpaid corporate tax and underpaid estimates accrues daily from the original due date. The annual interest rate for 2026 is 10.25 percent.13Montana Department of Revenue. Interest and Penalties Paying what you owe by the original deadline matters even when you use the automatic six-month filing extension, because the extension does nothing for interest.
Recordkeeping After You File
Montana requires corporations to keep all records and supporting data used to prepare the return for at least five years from the due date or five years from the payment date, whichever is later.14Montana Secretary of State. 42.2.305 Availability and Retention of Taxpayer Records That means the federal Form 1120, every Montana schedule, apportionment workpapers, and any documentation backing your additions and subtractions.