Pass-Through Information Return Filing Requirements

A pass-through entity must file an Informational Tax Return if:

  • The pass-through entity has any amount of Montana source income, whether a gain or loss;
  • The pass-through entity filed a return in a prior year and did not mark the return final; or
  • The pass-through entity did not report as inactive (see below).

An informational return calculates and reports Montana adjustments to income, the entity's Montana source income, and the Montana tax credits passed to owners.

Partnerships and S Corporations

Partnerships and S corporations file the Montana Pass-Through Entity Tax Return (Form PTE).

Disregarded Entities

Disregarded entities file the Montana Disregarded Entity Information Return (Form DER-1) if:

  • it is owned by a nonresident owner,
  • it is owned by an electing § 761 IRC partnership, or
  • it is an electing § 761 IRC partnership.

Disregarded entities file based on the owner's filing method. Disregarded entities owned directly or indirectly by a partnership or an S corporation are included on the owner's return:

  • A disregarded entity with Montana source income from activity in Montana must be included on List of Disregarded Entities (Form PTE, Schedule VII) of the owner's Form PTE.
  • A pass-through entity with Montana source income it receives only from another pass-through entity does not need to file Schedule VII.

Disregarded entities owned by a C corporation report their Montana source income on the Montana Corporate Income Tax Return (Form CIT)

Disregarded entities that are single member LLCs owned by a nonresident individual file Form DE and attach it to the owner’s Form 2.  

Inactive Pass-Through Entities

If a pass-through entity filed a return for a prior year, the entity must file an Affidavit of Inactivity for Corporations, Partnerships and Disregarded Entities (Form INA-CT) through our TransAction Portal (TAP). A pass-through entity that is registered to do business in Montana may file a Form INA-CT to inform the Department of Revenue that the entity is not active.