ARM 42.15.1512. RESIDENT MILITARY SALARY EXCLUSION

(1) The following items of military compensation received by a resident military servicemember are exempt from Montana income tax: (a) basic, special, and incentive pay received for serving on active duty as a member of the armed forces; (b) basic, special, and incentive pay received for serving on active duty as a member of the National Guard; (c) basic, special, and incentive pay received by a member of a reserve component of the armed forces or a member of the National Guard, for active duty in a "contingency operation" as defined in 10 USC 101; and (d) basic, special, and incentive pay received by a member of the National Guard performing a "homeland defense activity" as defined in 32 USC 901. (2) Military compensation that is not exempt from Montana income tax includes: (a) salary received for annual training and inactive duty training for service not described in (1)(b) through (1)(d); (b) salary received by a member of a reserve component of the armed forces for service not described in (1)(b) through (1)(d); (c) salary received by a member of the National Guard engaged in "active Guard and Reserve duty" as defined in 10 USC 101, for service not described in (1)(b) through (1)(d); and (d) retired, retainer, or equivalent pay, or allowances that do not fall under the subtraction for military retirement income found in 15-30-2120, MCA.