Annual Tax Withholding Statements
Individuals who earn wages by performing services in Montana are liable for Montana income tax. Every employer who resides in Montana and every non-resident employer who pays wages for services performed in Montana must withhold Montana income tax, unless the compensation is specifically exempted by law. Withholding on distributions from pensions, annuities and other deferred-type compensation is voluntary, but if an employee requests withholding on this income, the employer must comply.
Every employer shall, on or before February 28 in each year, file with the Montana Department of Revenue a wage and tax statement (W-2) for each employee to whom Montana wages were paid, regardless of whether any tax was withheld, and a copy of every Form 1099 pertaining to Montana residents. An Annual Reconciliation Form (MW-3) must accompany each batch of W-2 and 1099-R forms, or any other type of information returns that report total withholding greater than zero.
E-Filing Withholding Forms
· File your MW-3 annual withholding tax reconciliation on TAP.
· Securely submit your W-2s & 1099s using File Transfer Service.
· ACH credit payment instructions can be found here.
- All forms W-2, 1099, 1098, 5498 and W-2G must be submitted electronically or as paper documents. Magnetic media is not an option.
- Form MW-3 is an annual withholding reconciliation and is easily submitted using the Taxpayer Access Point (TAP) application or on a paper form, completed by the employer or its agent. The form should show the total number of W-2 and/or 1099 forms (W2s & 1099s can be submitted electronically using ePass/FTS), the total amount of wages and withholding, and the dates of each withholding payment. This form is mailed to every registered employer during December, and additional forms may be requested by calling the department toll free at 1-866-859-2254 or by downloading it from the State website. Submitters may also generate a substitute Form MW-3 themselves, provided that the layout and content are consistent with the form provided by the department.
- Form MW-3 is required to be filed for any W-2 documents, whether or not any tax is withheld, and regardless of whether the W-2s are sent electronically or on paper.
- Form MW-3 is required to be filed with any 1099 documents that indicate Montana tax withheld. Employers sending paper copies of 1099, 1098, 5498 or W-2G documents that don’t indicate any state withholding may use IRS Form 1096 as the transmittal form. Electronically filed 1099s with no withholding do not require a transmittal form.
- Corrections to an original W-2, 1099 or MW-3 must be submitted on a paper form.
Preferred Standards for Paper W-2 / 1099 Submissions
In order to properly scan and key withholding documents, the following guidelines are necessary. For the purposes of these standards, the term 1099 refers to all types of information returns, including 1097-BTC, 1098, 1099, 3921, 3922, 5498, 8935, W-2G and 1042-S. Form W-2 is sometimes referred to as a Wage and Tax Statement.
- Forms should be submitted on standardized forms that contain the same fields and wording shown on the IRS downloadable forms. The forms should include all fields even if some fields are not applicable to your employees.
- Do not submit more than one copy of each W-2 or 1099 form to the Department of Revenue.
- If forms are copied onto 8 ½ by 11 inch paper, do not put more than one form per sheet.
- Hand written forms need to be legible.
- The content of a field must be totally within the field.
- Every W-2 form must include the identification numbers of both the employer and the employee. These identification numbers are normally the employer’s Federal EIN and the employee’s Social Security number or TIN (if not a U.S. citizen).
- W-2 forms submitted on paper should be accompanied by Form MW-3 Annual Wage Withholding Tax Reconciliation. If the MW-3 was submitted electronically via our Taxpayer Access Point (TAP) application, attach a copy of the form that was printed during the submission process.
- Every information return must include two identification numbers. The titles depend on the the type of return and may include payer, recipient, lender, borrower, issuer, trustee, policyholder, winner, beneficiary, participant, trustee, or something else. The identification number would normally be a Federal EIN and/or a Social Security number.
- Information returns submitted on paper should be accompanied by Form 1096 which provides contact information and the type of return(s) you are submitting.
All annual statements and paper W-2/1099 should be sent to:
Montana Department of Revenue
P.O. Box 5835
Helena MT 59604-5835
Penalties for Late Filing
Annual statements postmarked after February 28 are subject to a late filing penalty of $5.00 per W-2 (minimum $50) in accordance with Montana Code Annotated, Title 15, Section 15-30-2509(2).
Last updated 4/6/2013 9:56:16 AM