(1) When the taxpayer owns the dwelling but rents the land or owns the land and rents the dwelling, the taxpayer shall add the rent-equivalent tax paid on the rented property to the property tax billed on the owned property. The total shall then be reduced as provided by 15-30-2340, MCA. The tax credit will be the reduced amount or $1,000, whichever is less.
(2) To calculate the credit, an eligible claimant is allowed to use property taxes billed:
(a) on property held in a revocable trust if the grantor(s) of the property or their spouse is the claimant and are trustees of the revocable trust;
(b) as rent if the property occupied by the claimant is in a name other than the claimant; or
(c) if the claimant has a living trust or a life estate.
(3) When a taxpayer lives in a health, long-term, or residential care facility (facility), as defined in 50-5-101, MCA, the rent allowed in calculation of the property tax credit is the actual out-of-pocket rent paid.
(a) If one spouse lives in a facility and the other lives at a different address, they are allowed to report either the rent paid for the facility or the rent/property taxes billed for the other address, but not both. Married taxpayers who are living apart are entitled to file and receive only one claim per year.
(b) Prior to January 1, 2017, if a claimant lived in a facility that did not provide an adequate breakdown between "rent" and "amenities" paid, the rent allowed is limited to:
(i) $20 a day for periods beginning on or before December 31, 2014; or
(ii) $30 a day for periods beginning after December 31, 2014.
(c) For claims for periods beginning after December 31, 2016, if a claimant lives in a facility, the out-of-pocket rent being claimed must exclude payments for amenities. To satisfy this obligation, the claimant must either:
(i) utilize a detailed statement provided by the facility itemizing the amount paid for rent and the amount paid for amenities separately; or
(ii) determine the amount of allowable rent by deducting the amenities from the total amount paid as follows:
(A) 20 percent for services related to board such as meals, housekeeping, laundry, and transportation;
(B) 30 percent for services related to continuous care such as assisted living, medical care, paramedical care, memory care, medical supplies, and pharmacy; or
(C) 50 percent if the services in both (A) and (B) are provided.
(d) Examples of calculating the allowable rent in (c) are as follows:
(i) Val rents a room in an independent living facility. Her $1,000 monthly payment includes utilities and parking, but no services delivered by personnel. No calculation is needed. Val is allowed to report the full $1,000 per month as rent.
(ii) Paul rents a room in an independent living facility. In addition to utilities and cable, his $2,500 monthly payment includes board such as housekeeping, meals, and transportation provided by staff and contractors. The facility's year-end statement does not break out his total paid. Paul deducts 20 percent ($2,500 - 20%) for the board services to calculate $2,000 per month as allowable rent to report.
(iii) Ron lives in a long-term care facility and receives board services, assistance with daily living activities, and special memory care. The facility's year-end statement partially breaks out his $40,000 total payment, showing the amount charged by a contractor for his memory care. It does not list the amounts charged for board and care provided by staff. Ron deducts 50 percent ($40,000 - 50%) for board (20%) and care (30%) to calculate $20,000 as allowable rent to report for the year.
(iv) George rents an apartment in an assisted living facility. The facility's year-end statement breaks out his $30,000 total payment as $14,400 for rent, $5,000 for board, and $10,600 for care. George may report the $14,400 stated rent amount or, alternately, choose to deduct 50 percent from the total ($30,000 - 50%) for board (20%) and care (30%) to calculate $15,000 as allowable rent to report for the year.
(v) Mary rents a room in an assisted living facility for six months while recovering from a medical procedure. Her $2,000 total monthly payment includes assistance with daily living activities provided by staff, but she chose not to receive any additional services such as board. The facility does not itemize her payment. Mary deducts 30 percent from the monthly payment ($2,000 - 30%) for the care to calculate $1,400 per month in allowable rent. Mary may report either the allowable rent paid to the facility, or the monthly rent she paid for her primary residence during the same six-month period, but not both.