Form Ftb - Montana First-Time Home Buyer Savings Account Worksheet printable pdf download

Form FTB Instructions

Purpose of this form. A resident who establishes a first-

How long can I invest in and maintain my Montana first-time

home buyer account?

time home buyer savings account to pay eligible costs for the

purchase of their first single-family residence is allowed to exclude

You can contribute to your Montana first-time home buyer savings

contributions of up to $3,000 annually in determining Montana

account for a period of 10 years. The funds you have in your

adjusted gross income, as well as interest and other income

Montana first-time home buyer account will have to be used to

earned on the account. This form needs to be included each year

pay for eligible costs for purchasing your first-time home within

with the account holder’s individual income tax return.

10 years after the year you establish your account. Any principal

Definitions

and income in your first-time home buyer account not used to

purchase your home within this 10 year period, or after you have

First-time home buyer is a Montana resident individual who has

purchased your home, is taxed as ordinary income.

never individually or jointly owned or purchased under a contract

I opened my Montana first-time home buyer account by

for deed a single-family residence in Montana or out-of-state.

transferring more than $3,000 from my regular savings

Single-family residence is an owner-occupied residence in

account to my first-time home buyers account. Can I exclude

Montana. The term includes a manufactured home, trailer or

my excess deposits into my first-time home buyer savings

mobile home if the running gear is removed, if it is attached to a

account in subsequent years?

permanent foundation, and if your statement of intent declaring it

Yes. As long as you remain a first-time home buyer and have not

as an improvement to real property has been recorded with the

purchased your first-time home, you can deposit into an account

county clerk and recorder on a form furnished by the Department

more than the maximum exclusion in any given tax year and may

of Justice. The term also includes a condominium unit.

exclude in subsequent years any amounts previously deposited

Eligible costs are the amounts that you pay for the down

and not excluded as principal in a prior year.

payment and allowable closing costs for the purchase of your

Once you purchase your single-family residence, you are no

single-family home in Montana.

longer a first-time home buyer. You cannot exclude from federal

Nonqualified withdrawals are any withdrawals from your

adjusted gross income any amount deposited into your first-time

account that are not used for the down payment and allowable

home buyer account or any excess deposits that were previously

closing costs.

made to your first-time home buyer account after purchasing your

home.

Frequently Asked Questions

I have a Montana first-time home buyer savings account. I

What is required to establish a Montana first-time home

withdrew funds during 2014 that were not used to purchase

buyer savings account?

a home. Are these withdrawals considered nonqualified

withdrawals and are there any penalties related to them?

This account is available to you if you are a resident of Montana

who has never owned a single-family residence either jointly

Yes, these would be considered nonqualified withdrawals. When

or alone and you established a first-time home buyer savings

you withdraw funds from your first-time home buyer account

account either alone or jointly with another person, who also

that are considered nonqualified withdrawals, there are two tax

qualifies as a first-time home buyer. You can deduct annual

consequences. First, the withdrawals are taxable as ordinary

contributions to the account of up to $3,000 or, if you are married

income. Second, you are also subject to a 10% penalty on

and you file a joint return with your spouse, of up to $6,000. Your

these withdrawals. You will need to complete Part II of this

account has to be a new account established in the first year that

form to calculate your penalty. Nonqualified withdrawals that

you claim the deduction. Existing accounts do not qualify.

are withdrawn on the last business day of your tax year are not

subject to this 10% penalty, but they are included as taxable

How much can I contribute to my Montana first-time home

income and are included as an addition to federal adjusted gross

buyer savings account this year, and how much of this

income in arriving at Montana adjusted gross income.

amount can I exclude from my federal adjusted gross income

for 2014?

I have a Montana first-time home buyer account that I

established while I was a resident of Montana. I have now

There is no limit in any one year on the amount that you may

moved to another state. Can I still maintain my Montana first-

deposit into your Montana first-time home buyer savings account,

time home buyer account?

but there is a limit on the amount that you can exclude from your

federal adjusted gross income to arrive at your Montana adjusted

No. A nonresident who files a final return in Montana must report,

gross income.

as income in the final year of residency, the amount of principal

and interest previously excluded from adjusted gross income.

If your filing status is single, head of household or married filing

separately, the maximum amount that you can exclude from your

As a nonresident, your withdrawal from the account is considered

federal adjusted gross income in any one year is $3,000 plus

a nonqualified withdrawal and the amount of principal and interest

the interest or other income earned on this amount. If you are

or other earnings previously excluded from Montana adjusted

filing your return jointly with your spouse, the maximum amount

gross income is considered ordinary income to Montana and

that you can exclude from your federal adjusted gross income is

subject to tax and the 10% nonqualified withdrawal penalty unless

$6,000 plus the interest or other income earned on this amount.

it is withdrawn at the end of the tax year.

Amounts deposited over the limitations listed above cannot be

excluded on your 2014 income tax return, but may be excluded in

Administrative Rules of Montana: 42.15.901 through 42.15.907

future years.

Form Ftb - Montana First-Time Home Buyer Savings Account Worksheet

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