MONTANA UI WAGE & EMPLOYMENT TAX CHART

Special Classes of Employment and
Special Types of Payments

Unemployment Insurance
Tax Treatment

Advances against future earnings.

Taxable, when paid

Agricultural Labor.

Taxable if total cash wages exceed $20,000 in any quarter or if employ 10 or more workers on 20 different days in 20 different weeks in calendar year.

Aliens, nonresident.

1. Working under section 101(a)(15) of the Immigration and Nationality Act, as amended, for the purposes identified in 8 USC 1101(a)(15) (F), (H)(ii)(a), (J), (M), or (Q).
2. Working under any other condition or visa not listed above.

Exempt

Taxable

Aliens, resident : Service performed in Montana

Taxable

Annuities: Payments made by the employer into a fund for retirement or death benefits, under a plan offered to all employees or a class or classes of employees.

Exempt

Back Pay paid as a result of a dispute related to employment

Taxable

Bonuses.

Taxable

Cafeteria plan deductions under IRC Section 125.

Taxable

Commissions.

Taxable

Corporate Officer Payments: corporate officers performing a service for the corporation (includes subchapter S corporations) are employees. (Also see Profit Distribution).

Taxable

Cosmetologists or barbers: who are licensed, contracts with a shop, is free from control and direction of the owner, owns or leases equipment, receives payment from the clientele, and acknowledges in writing that their work is not covered by UI.

Exempt

Deceased worker : Wages paid to beneficiary or estate after worker's death.

Taxable

Deferred Compensation. (see Retirement/Pension plans)

Taxable

Dependent care assistance programs under Section 129 of IRC or other assistance provided for dependent care.

Taxable

Director Fees: Customary and reasonable fees paid to directors of a corporation for attending meetings of the board of directors.

Exempt

Dividends.

(see Profit Distribution)

Employee Benefit Plans, Perks furnished/paid by the employer.

1. Retirement, sickness or accident disability, medical, hospitalization or death benefits.
2. No additional cost service, where the benefit provided has no monetary impact to the employer, such as lift tickets provided by a ski lodge to its employees.
3. Discounts on merchandise or services, or other benefits.

Exempt

Exempt

Taxable - at cash value

Employee Business Expense Reimbursement :

1. Actual expenses, if documented and entered separately in business records.
2. Non-receipted travel expenses at the rate allowed for state employees.

Exempt*

Exempt*

Equipment Rental Payments:

1. Payment for rental of equipment owned by the employee that is necessary for the employee to perform job.
2. Hand tools commonly used in the employee's trade.
3. Vehicle used only to transport worker to and from job site.

Exempt

Taxable

Taxable

Family Employees:

1. Dependent member of sole proprietor (or partnership in which each partner is a parent of the child) for whom an income tax exemption may be claimed.
2. Spouse employed by spouse.
3. Parent employed by child.

Exempt

Exempt

Taxable - unless the parent is a dependent of the sole proprietor.

Foreign Government or International Organization : Working for foreign government or organization with service performed in Montana.

Taxable

Foreign service by Montana citizens : For foreign affiliates of American employers and other private employers.

Taxable, if working for American employer (unless in a country in which the US has an agreement for UI)

Gifts.

Taxable

Gratuities.

(see Tips)

Holiday Pay.

Taxable

Home workers (industrial, cottage industry): Individuals who perform services at their homes, often paid on a piecework basis.

Taxable

Hospital employees :

1. Interns
2. Patients

Taxable

Taxable

Household employees :

1. Domestic service in private homes, college clubs, fraternities, and sororities.
2. Companionship services (as defined in 29 CFR 552.6) or respite care (because of age or illness).

Taxable if total cash wages are $1,000 or more (for all household employees) in any quarter in the current or preceding calendar year.

Exempt - if employed by a family member or legal guardian. (You may request voluntary coverage.)

Income Tax Withholding: Withholding from an employee's wages for federal and/or state income taxes

Taxable

Insurance for employees:

1. Accident and health insurance premiums paid by the employer into a qualified plan for the employee or the employee's immediate family.
2. Life insurance premiums paid by the employer for the employee or the employee's immediate family.

Exempt

Exempt

Insurance agents/salespeople .

Exempt - if paid solely by commission without guarantee of minimum earnings.

Loans.

Taxable unless the employee is to repay the loan under a written schedule agreed to by the employer and the employee.

Limited Liability Companies (LLC's) :

1. Payments to members or managers of LLC's, that file a Schedule C as sole propietor or 1065 return as partner.
2. Payments to members or managers of LLC's that file Schedule 1020 as a Corporation or Sub-S Corporation.

Exempt

Taxable

Meals.

(see Room and Board)

Exempt – click here for allowable reimbursement

Newspaper employees :

1. Carriers who delivers newspapers singly or in bundles and have acknowledged the service is not covered by UI.
2. Freelance correspondents who submit articles or photographs for publication and are paid by the item, and acknowledge the service is not covered by UI.

Exempt

Exempt

Non-cash payments:

1. For household work, agricultural labor, and service not in the course of the employer's trade or business.
2. Other non-cash payments for services performed.

Taxable - if the employer meets subjectivity requirements

Taxable at the cash value.

Non-profit organizations . (Wages paid by)

Taxable if employer meets subjectivity requirements

Officers or shareholders of a Corporation .

Distributions and other payments by a corporation to a corporate officer or shareholder to the extent the amounts are reasonable compensation for services to the corporation by the officer or shareholder.

Taxable

Officials: Services performed by an individual as an official, including timer, referee, umpire, or judge, at an amateur athletic event.

Exempt

Partners or sole proprietor : Distribution of profits to general or limited partners of a partnership or to a sole proprietor.

Exempt

Profit Distribution:

1. Distribution of profit to sole proprietors and partners.
2. Payments distributed to corporate officers or shareholders in lieu of reasonable compensation for services performed, even though designated as profits or dividends.

Exempt

Taxable

Railroads : Employment with any railroad engaged in interstate commerce.

Exempt - excludes construction of railroads.

Religious Organizations :

1. Services performed by a duly ordained, commissioned, or licensed minister of a church in a ministerial duty or by a member of a religious order in the exercise of duties required by the order.
2. Services performed by non-clergy employees.

Exempt

Taxable

Retirement and Pension plans:

1. Employer contributions to a qualified pension or retirement plan.
2. Elective employee contributions, salary reductions or deferrals to a 401(k) or any other type of retirement plan.

Exempt

Taxable

Room and Board, Meals, etc. furnished to an employee as part of the terms of their employment.

Taxable - must report cash value; minimum value of $130 per week for full room and board; $3 per meal

Salespersons :

1. Statutory non-employees, including direct sellers and real estate and insurance agents paid solely by commission.
2. Other salespersons, regardless of method of payment.

Exempt

Taxable

Severance, termination or dismissal pay .

Taxable

Sick Pay .

Taxable for the first 6 months following the month the employee last worked.

Social Security Taxes: deductions from an employee's gross wage for FICA.

Taxable

State governments and political subdivisions (employees of):

1. Salaries and wages of non-elected employees.
2. Salaries and payments to elected officials.
3. Election judges. Election judges are individuals who are employed to perform services for state or local governments at election booths in connection with national, state, or local elections.
4. Payments made into a qualified tax exempt trust for qualifying health care expenses under the Voluntary Employees’ Beneficiary Association (VEBA) Act.

Taxable

Exempt

Exempt

Exempt

Students, scholars :

1. Student enrolled and regularly attending classes, performing services for a non-profit or public educational institution.
2. Full-time student performing service for academic credit, combining instruction with work experience as an integral part of the program.

Exempt

Exempt

Tips or gratuities :

1. Tips or other gratuities received by the employee and documented to the employer.
2. Allocated tips.

Taxable

Exempt

Vacation. Paid vacation for employee.

Taxable

Vehicles: personal use of a company vehicle.

Taxable