2025 Legislative Roundup: HB 863 Interest Waiver

Changes to the calculation of Montana taxable income that took effect for tax year 2024 may have resulted in some individuals seeing a larger than expected balance due when filing their tax return. Some may have experienced this due to not enough wage withholding for their filing status. Others may have overlooked the elimination of some deductions when estimating their tax liability for 2024.

These and similar situations may have led to a balance due large enough to result in the assessment of Interest on Underpayment of Estimated Tax for some individuals. This can occur when the amount of tax withheld or paid through estimated tax payments does not equal at least 90% of the current tax period or 100% of the prior tax period.

The Montana Legislature passed House Bill 863, which included a provision providing some relief from this assessment. Under the provisions of the bill, an individual who filed their 2024 Montana tax return by April 15, 2025, paid the tax in full, and was charged Interest on Underpayment of Estimates (including self-reported amounts), can request a special waiver. The waiver must be requested before January 1, 2026; any waiver request received after December 31, 2025 will not be considered.

Use Form APLS101F - Request for Informal Review, to request this waiver. Complete the “Taxpayer Information” section and mark the box in the “Penalty Waiver Request” portion. Write in “under House Bill 863” after “Mark this box if you are requesting a waiver of penalty”.  

Sign the “Declaration” section and complete the “Authorized Representative” portion if you choose to have someone represent you. Submit the form as indicated in the instructions. You can also submit your waiver through an email with all the relevant information at DORObjections@mt.gov.