The Montana Legislature convened on March 28, 2025, to introduce House Bill 845, a legislative proposal aimed at enhancing tax benefits for contributions made to certain accounts by Montana residents. The bill seeks to address the financial burden on families by increasing the allowable tax deduction for contributions to accounts owned by contributors, their spouses, or their children and stepchildren who are residents of Montana.

Key provisions of House Bill 845 include an increase in the maximum tax deduction from $3,000 to $4,500 for the tax year 2025. This adjustment is designed to provide greater financial relief to families contributing to these accounts. Furthermore, the bill stipulates that the total amount of contributions for subsequent tax years will be adjusted based on an inflation factor, calculated using the consumer price index from June of the previous year.

The bill also includes a coordination section, indicating that if both House Bill 845 and Senate Bill 53 are passed and both amend the same tax code section, the amendments from Senate Bill 53 would take precedence. This aspect of the bill has sparked discussions among legislators regarding potential conflicts and the implications for tax policy.

House Bill 845 is positioned to have significant economic implications for Montana families, particularly those with children, as it aims to alleviate some of the financial pressures associated with education and savings accounts. The retroactive applicability of the bill means that it will affect tax years beginning after December 31, 2024, allowing families to benefit from the increased deduction sooner than anticipated.

As the bill progresses through the legislative process, it has garnered both support and opposition. Proponents argue that the increased deduction is a necessary step to support families in Montana, while critics express concerns about the potential impact on state revenue and the prioritization of tax benefits for certain demographics.

The next steps for House Bill 845 will involve further discussions and potential amendments as it moves through the legislative chambers. The outcome of this bill could set a precedent for future tax legislation in Montana, making it a focal point for both lawmakers and constituents alike.