MT HoH 25Kpwages 2Kintrec 23Kpensions 13Kgssi 3.5Kchildcare

[feenberg]

See http://taxsim.nber.org/out2psl/948

Taxable income does not match, perhaps because PE does not allow the "additional deduction for seniors" (13b on Form 1040) on the Montana return.

[PavelMakarchuk]

Verified against Mont. Code § 15-30-2120:

"The items in subsection (2) are added to and the items in subsection (3) are subtracted from federal taxable income to determine Montana taxable income."

So MT taxable income starts from federal taxable income (Form 1040 Line 15), which already includes the new federal OBBBA $6,000 senior deduction (Schedule 1-A Part V → Form 1040 Line 13b).

TaxAct's MT Form 2 effectively encodes this conversion on Line 2:

• Line 1 Fed AGI: $68,950
• Line 2 subtractions ($25,625 fed std ded + $6,000 Sched 1A senior + $0 QBID): $31,625
• Line 3 ≈ Fed taxable income: $37,325
• Line 6 MT-specific deduction: $5,660 (= MT old-age subtraction)
• Line 7 MT taxable income: $31,665

PE-US misses the $6,000:

• mt_standard_deduction = $25,625 (correctly replicates fed std + age-65 addition) ✓
• mt_old_age_subtraction = $5,660 (correctly per § 15-30-2120(3)) ✓
• Missing: federal Schedule 1-A senior deduction ($6,000) — should be subtracted from MT AGI to reach federal taxable income
• PE mt_taxable_income = $37,666 — exactly $6,000 over the statute-correct $31,665

Filed PolicyEngine/policyengine-us#8562 to wire the federal Schedule 1-A items (and OBBBA tip/overtime/car-loan deductions, since MT formally starts from federal taxable income per § 15-30-2120) into MT subtractions. Will close this once that PR lands.