(1) Each program manager shall submit a report to the department via the state of Montana's secure file transfer service (or functional equivalent), by February 28 following the close of the preceding tax year which identifies all contributions and withdrawals for family education savings accounts for which the account owner is, or was at the time the account was opened, a Montana resident. The report must be submitted in an electronic format sortable by the following information for each contributor, designated beneficiary, account owner, and distributee:

(a) full name;

(b) last reported address;

(c) social security number;

(d) amount of the contributions;

(e) amount of the withdrawals (and to the extent that the Internal Revenue Service requires such information with respect to withdrawals, the portion constituting contributions and the portion constituting earnings); and

(f) in the case of the account owner, a notation as to whether the distribution is an early or nonqualified withdrawal.

(2) At the request of the department, a program manager shall provide complete copies of any other reports about accounts that it provides to either the Internal Revenue Service or the Montana Board of Regents. 

(3) A program manager shall report a withdrawal as an early withdrawal if the withdrawal is made within one year of the date that the account was opened.

(4) A program manager shall withhold the recapture tax from any recapturable withdrawal from an account that was at any time owned by a resident of Montana but that at the time of the withdrawal is not owned by a person who is a resident of Montana. For purposes of this provision, the program manager shall assume that the account owner's address is the last address that the account owner reported to the program manager.

(5) Any recapture tax that is withheld shall be paid to the department not later than the last day of the month following the month in which such withholding occurred. A program manager shall have no liability to the department for failure to withhold recapture tax if such error was made in good faith.

(6) A taxpayer who makes a recapturable withdrawal, for which withholding would be required, may petition the department in writing to determine the amount of the recapture tax. The petition shall include all facts relevant to the proposed withdrawal, including information about the account and other accounts owned by the taxpayer and evidence to show that all or a portion of the contributions are not attributable to previously deducted contributions. If the department is satisfied with the evidence, it shall issue a letter determining the recapture tax to be withheld by the program manager.

(7) Nothing in statute or rule prevents the department from directly contacting the contributor, designated beneficiary, account owner, or distributee for the reporting information described herein.  


History: 15-30-2620, 15-62-201, MCA; IMP, 15-30-2110, 15-62-201, 15-62-208, MCA; NEW, 1998 MAR p. 680, Eff. 3/13/98; AMD, 2000 MAR p. 1344, Eff. 5/26/00; AMD, 2004 MAR p. 1031, Eff. 4/23/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2021 MAR p. 76, Eff. 1/16/21; AMD, 2022 MAR p. 1948, Eff. 9/24/22.