Department of Revenue Explains Available Tax Relief Options for Loss Due to Natural Disaster

Tax Relief and Assistance for Loss Due to Natural Disaster, Including Fires, Floods and Drought 

The Department of Revenue expresses sincere sympathy to those Montanans whose homes, lands and other property have been damaged or destroyed by a natural disaster. Please let us help. If you are a Montana property owner who has experienced a loss of your dwelling, other buildings, or forestland due to a natural disaster, you may be eligible for property tax relief or an income tax filing extension.

We can provide you with necessary information, as well as issue replacement copies of property records, past-year tax returns or other revenue-related information.

Eligible Properties

Real property dwellings - All or partially destroyed

Real property improvements (such as garages, sheds, barns and grain bins) - All or partially destroyed

Manufactured housing and mobile homes - All or partially destroyed

Business equipment - All or partially destroyed

The property must have been rendered unsuitable for its previous use to qualify for property tax relief. The relief is prorated based on the number of days in the current tax year that the property was unsuitable for its previous use. 

You can apply by completing a Natural Disaster Application (Form AB-25). This application is also available in all Department of Revenue local offices. Simply call your local office to have a form mailed to you.  If needed, your local Department of Revenue office can provide you with necessary property information to complete the form.    

Eligible Lands

Forest lands impacted by a natural disaster to such an extent the lands do not meet the minimum stocking requirements, the landowner may file for property tax relief. The landowner must show that the stocking rate of the lands has been reduced below the minimum requirements. This adjustment results in a 50% reduction in forest productivity value for 20 years from the date of the disaster. The first reduction is available the year following the disaster event.

You can apply by completing a Form AB-26. This application is also available in all Department of Revenue local offices. Simply call your local office to have a form mailed to you.  If needed, your local Department of Revenue office can provide you with necessary property information to complete the form. 

Federal Income Tax Deduction

Property owners may also be eligible for a federal income tax casualty loss deduction on Schedule A, Itemized Deductions. The same Form 4684, Casualties and Thefts, is required for both the Montana state return and the federal Form 1040. Additional information is available by visiting the Internal Revenue Service website, and typing "Tax Topic 507" in the search box.