diff --git a/changelog.d/mt-elderly-credit-disability-unemployment.fixed.md b/changelog.d/mt-elderly-credit-disability-unemployment.fixed.md
new file mode 100644
index 00000000000..00d4cb4a5c6
--- /dev/null
+++ b/changelog.d/mt-elderly-credit-disability-unemployment.fixed.md
@@ -0,0 +1 @@
+Count employment disability benefits and unemployment compensation excluded from federal AGI (the 2020 IRC 85(c) exclusion) in Montana's elderly homeowner/renter credit gross household income.
diff --git a/policyengine_us/parameters/gov/states/mt/tax/income/credits/elderly_homeowner_or_renter/gross_income_sources.yaml b/policyengine_us/parameters/gov/states/mt/tax/income/credits/elderly_homeowner_or_renter/gross_income_sources.yaml
index fb84aef0128..e58384f3072 100644
--- a/policyengine_us/parameters/gov/states/mt/tax/income/credits/elderly_homeowner_or_renter/gross_income_sources.yaml
+++ b/policyengine_us/parameters/gov/states/mt/tax/income/credits/elderly_homeowner_or_renter/gross_income_sources.yaml
@@ -18,17 +18,23 @@ metadata:
     href: https://rules.mt.gov/api/policy-library-public/collections/aec52c46-128e-4279-9068-8af5d5432d74/policies/c90ea93a-03a2-4605-a0f8-f2f3760198bf/document/297c7a8d-f6f4-4b70-a7b7-fe1cedee53e7
   - title: ARM 42.4.301(2) as in effect from 9/7/2024 ("federal refundable tax credits received" and "any state refundable tax credits received")
     href: https://rules.mt.gov/api/policy-library-public/collections/aec52c46-128e-4279-9068-8af5d5432d74/policies/c90ea93a-03a2-4605-a0f8-f2f3760198bf/document/768c8344-24ee-4950-9d5e-9d8fc97ec0f7
-  - title: 2016 Montana Form 2EC instructions, Part II, disability benefits including SSI payments and workers' compensation, and cash public assistance and relief
+  - title: "2014 Montana Form 2EC instructions, Part II, disability benefits including SSI payments and workers' compensation; Income Source Worksheet, line 7, alimony, cash public assistance, unemployment #page 53-54"
+    href: https://taxsim.nber.org/historical_state_tax_forms/MT/2014/Form_2_booklet_2014.pdf#page=53
+  - title: "2016 Montana Form 2EC instructions, Part II, disability benefits including SSI payments and workers' compensation, and cash public assistance and relief; Gross Household Income Worksheet, line 7, alimony, cash public assistance, unemployment #page 74-75"
     href: https://taxsim.nber.org/historical_state_tax_forms/MT/2016/Form_2_booklet_2016.pdf#page=74
-  - title: "2017 Montana Form 2EC instructions, Part II, disability benefits including SSI payments and workers' compensation, and cash public assistance and relief; Gross Household Income Worksheet, items 4 and 5 #page 64-65"
+  - title: "2017 Montana Form 2EC instructions, Part II, disability benefits including SSI payments and workers' compensation, and cash public assistance and relief; Gross Household Income Worksheet, items 4 and 5 (alimony, cash public assistance, unemployment) #page 64-65"
     href: https://taxsim.nber.org/historical_state_tax_forms/MT/2017/Form%202%202017%20Booklet.pdf#page=64
-  - title: "2022 Montana Form 2 instructions, Elderly Homeowner/Renter Credit Schedule, gross household income; line 8, disability benefits including SSI payments and workers' compensation #page 47-48"
+  - title: 2020 Montana Form 2 instructions, Elderly Homeowner/Renter Credit Schedule, line 1, federal adjusted gross income; line 8, other income not listed above, including disability benefits
+    href: https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2020_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=45
+  - title: 2021 Montana Form 2 instructions, Elderly Homeowner/Renter Credit Schedule, line 8, other income not listed above, including disability benefits
+    href: https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2021_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=49
+  - title: "2022 Montana Form 2 instructions, Elderly Homeowner/Renter Credit Schedule, gross household income; line 8, other income, including disability benefits, SSI payments and workers' compensation #page 47-48"
     href: https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2022_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=47
-  - title: "2023 Montana Form 2 instructions, Elderly Homeowner/Renter Credit Schedule, line 7, refundable credits received; line 8, disability benefits including SSI payments and workers' compensation #page 51-52"
+  - title: "2023 Montana Form 2 instructions, Elderly Homeowner/Renter Credit Schedule, line 7, refundable credits received; line 8, other income, including disability benefits, SSI payments and workers' compensation #page 51-52"
     href: https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2023_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=51
-  - title: "2024 Montana Form 2 instructions, Schedule 2EC, gross household income; line 8, refundable credits received; line 16, government assistance #page 46-48"
+  - title: "2024 Montana Form 2 instructions, Schedule 2EC, gross household income; line 1, wages; line 8, refundable credits received; line 14, unemployment compensation; line 15, other income; line 16, government assistance #page 46-48"
     href: https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2024_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=46
-  - title: "2025 Montana Form 2 instructions, Schedule 2EC, line 8, refundable credits received; line 16, government assistance #page 45-46"
+  - title: "2025 Montana Form 2 instructions, Schedule 2EC, line 8, refundable credits received; line 14, unemployment compensation; line 15, other income; line 16, government assistance #page 45-46"
     href: https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2025_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=45
 
 values:
@@ -60,6 +66,21 @@ values:
     # (9)(a) counts all nontaxable income; a government-funded pilot is also
     # "any other government assistance" (Schedule 2EC line 16).
     - gi_cash_assistance
+    # Disability benefits from employment other than workers' compensation
+    # (2014-2023 instructions: "Disability benefits including, but not
+    # limited to, veteran's disability, SSI payments, and workers'
+    # compensation"; from 2024, Schedule 2EC line 1 for taxable sick pay and
+    # disability pay reported as wages, line 5 for a disability pension after
+    # minimum retirement age (IRS Pub. 525), otherwise line 15). The model
+    # leaves them out of federal AGI (irs_gross_income) and
+    # dependent_gross_income, so all of them count here, once.
+    - disability_benefits
+    # Unemployment compensation that neither federal AGI nor a dependent's
+    # own gross income counts, such as the 2020 IRC 85(c) exclusion (2020
+    # line 8, "all items of income ... not reported on lines 1 through 7";
+    # 2014-2017 worksheets, "Alimony, cash public assistance,
+    # unemployment"; Schedule 2EC line 14 from 2024, the total received).
+    - mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback
     # Refundable credits received (2023 schedule line 7, Schedule 2EC line 8
     # from 2024): Montana's refundable credits other than this credit,
     # and this credit as received during the year (ARM 42.4.301(2)(c)).
@@ -81,6 +102,8 @@ values:
     - tanf_person
     - workers_compensation
     - gi_cash_assistance
+    - disability_benefits
+    - mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback
     - mt_refundable_credits_before_renter_credit
     - mt_elderly_homeowner_or_renter_credit_received
     - mt_elderly_homeowner_or_renter_credit_federal_refundable_credits
@@ -101,6 +124,8 @@ values:
     - tanf_person
     - workers_compensation
     - gi_cash_assistance
+    - disability_benefits
+    - mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback
     - mt_refundable_credits_before_renter_credit
     - mt_elderly_homeowner_or_renter_credit_received
     - mt_elderly_homeowner_or_renter_credit_federal_refundable_credits
diff --git a/policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/credits/elderly_homeowner_or_renter/mt_elderly_homeowner_or_renter_credit_disability_and_unemployment.yaml b/policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/credits/elderly_homeowner_or_renter/mt_elderly_homeowner_or_renter_credit_disability_and_unemployment.yaml
new file mode 100644
index 00000000000..9a474ec7a5a
--- /dev/null
+++ b/policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/credits/elderly_homeowner_or_renter/mt_elderly_homeowner_or_renter_credit_disability_and_unemployment.yaml
@@ -0,0 +1,336 @@
+# Employment disability benefits and unemployment compensation outside
+# federal AGI in gross household income. § 15-30-2337(9)(a) counts federal
+# AGI "plus all nontaxable income". The 2014-2023 instructions list
+# "Disability benefits including, but not limited to, veteran's disability,
+# SSI payments, and workers' compensation"; the 2014-2017 worksheets list
+# "Alimony, cash public assistance, unemployment"; 2024 Schedule 2EC line 14
+# counts "the total of unemployment compensation received". SSI is pinned to
+# zero so that each case tests only the item it names.
+
+- name: Case 1, 2016 Form 2EC, the claimant's disability benefits count.
+  period: 2016
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 80
+        taxable_pension_income: 12_000
+        disability_benefits: 2_500
+        rent: 6_000
+        ssi: 0
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    # Gross Household Income Worksheet: line 8 pensions 12_000; line 9
+    # disability benefits 2_500; line 10 = 14_500, Form 2EC line 1.
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: 14_500
+    # Line 2 6_300; line 3 = 8_200; line 4 = 0.039; line 5 = 319.80.
+    mt_elderly_homeowner_or_renter_credit_net_household_income: 319.80
+    # Line 7 rent 6_000; line 8 = 900; line 9 = 900; line 10 = 900 - 319.80
+    # = 580.20; line 11 = 580.20; line 12 = 100%; line 13 = 580.20. Without
+    # the disability benefits, line 1 = 12_000, line 5 = 5_700 x 0.028 =
+    # 159.60 and the credit would be 740.40.
+    mt_elderly_homeowner_or_renter_credit: 580.20
+
+- name: Case 2, 2017 Form 2EC, a household member's disability benefits count.
+  period: 2017
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 72
+        taxable_pension_income: 15_000
+        real_estate_taxes: 1_200
+        ssi: 0
+      person2:
+        age: 45
+        disability_benefits: 5_000
+        ssi: 0
+    tax_units:
+      tax_unit1:
+        members: [person1]
+      tax_unit2:
+        members: [person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_name: MT
+  output:
+    # The claimant's adult son files his own return. Gross Household Income
+    # Worksheet: line 6 pensions 15_000; line 7 his disability benefits
+    # 5_000; line 8 = 20_000, Form 2EC line 1.
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: [15_000, 5_000]
+    # Line 2 6_300; line 3 = 13_700; line 4 = 0.05; line 5 = 685.
+    mt_elderly_homeowner_or_renter_credit_net_household_income: [685, 0]
+    # Line 6 = 1_200; line 9 = 1_200; line 10 = 515; line 11 = 515; line 12
+    # = 100%; line 13 = 515. Without his benefits, line 1 = 15_000, line 5 =
+    # 8_700 x 0.039 = 339.30 and the credit would be 860.70.
+    mt_elderly_homeowner_or_renter_credit: [515, 0]
+
+- name: Case 3, 2023 schedule line 8, a spouse's disability benefits count.
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 66
+        taxable_pension_income: 18_000
+        real_estate_taxes: 1_000
+        ssi: 0
+      person2:
+        age: 64
+        disability_benefits: 4_000
+        ssi: 0
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_name: MT
+  output:
+    # Joint return. Line 1 federal AGI 18_000; line 8 disability benefits
+    # 4_000; line 10 = 22_000.
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: [18_000, 4_000]
+    # Line 11 12_600; line 12 = 9_400; line 13 = 0.042; line 14 = 394.80.
+    mt_elderly_homeowner_or_renter_credit_net_household_income: [394.80, 0]
+    # Line 15 = 1_000; line 18 = 1_000; line 19 = 605.20; line 20 = 605.20;
+    # line 21 = 100%; line 22 = 605.20. Without the benefits, line 10 =
+    # 18_000, line 14 = 5_400 x 0.028 = 151.20 and the credit would be
+    # 848.80.
+    mt_elderly_homeowner_or_renter_credit: [605.20, 0]
+
+- name: Case 4, 2024 Schedule 2EC line 17, a household member's disability benefits count.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 75
+        taxable_pension_income: 20_000
+        rent: 9_600
+        ssi: 0
+      person2:
+        age: 45
+        disability_benefits: 7_000
+        ssi: 0
+    tax_units:
+      tax_unit1:
+        members: [person1]
+      tax_unit2:
+        members: [person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_name: MT
+  output:
+    # The claimant's adult son files his own return. Line 5 pensions 20_000;
+    # line 17 his disability benefits (line 1 or line 15 items for another
+    # member) 7_000; line 18 = 27_000.
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: [20_000, 7_000]
+    # Line 19 12_600; line 20 = 14_400; line 21 = 0.05; line 22 = 720.
+    mt_elderly_homeowner_or_renter_credit_net_household_income: [720, 0]
+    # Line 24 rent 9_600; line 25 = 1_440; line 26 = 1_440; line 27 = 720;
+    # line 28 = 720; line 29 = 100%; line 30 = 720. Without his benefits,
+    # line 18 = 20_000, line 22 = 7_400 x 0.035 = 259 and the credit would
+    # be the 1_150 cap.
+    mt_elderly_homeowner_or_renter_credit: [720, 0]
+
+- name: Case 5, 2025 Schedule 2EC, the claimant's own disability benefits count.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 64
+        taxable_pension_income: 16_000
+        disability_benefits: 6_000
+        real_estate_taxes: 1_300
+        ssi: 0
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    # Line 5 pensions 16_000; disability benefits 6_000 on line 1 if taxable
+    # and reported as wages, line 5 if a disability pension after minimum
+    # retirement age, line 15 if nontaxable; line 18 = 22_000 either way.
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: 22_000
+    # Line 19 12_600; line 20 = 9_400; line 21 = 0.042; line 22 = 394.80.
+    mt_elderly_homeowner_or_renter_credit_net_household_income: 394.80
+    # Line 23 = 1_300; line 26 = 1_300; line 27 = 905.20; line 28 = 905.20;
+    # line 29 = 100%; line 30 = 905.20. Without the benefits, line 18 =
+    # 16_000, line 22 = 3_400 x 0.016 = 54.40 and the credit would be the
+    # 1_150 cap.
+    mt_elderly_homeowner_or_renter_credit: 905.20
+
+- name: Case 6, 2020 schedule line 8, the claimant's unemployment compensation excluded from federal AGI counts.
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 66
+        taxable_pension_income: 16_000
+        unemployment_compensation: 9_000
+        real_estate_taxes: 1_500
+        ssi: 0
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    # IRC 85(c) excludes the 9_000 from 2020 federal AGI (AGI without it is
+    # 16_000, under 150_000). Line 1 federal AGI 16_000; line 7 refundable
+    # credits received, the 2020 recovery rebate credit 1_200 + 600 = 1_800;
+    # line 8 other income not listed above, the excluded 9_000; line 10 =
+    # 26_800.
+    adjusted_gross_income_person: 16_000
+    mt_elderly_homeowner_or_renter_credit_federal_refundable_credits: 1_800
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: 26_800
+    # Line 11 6_300; line 12 = 20_500; line 13 = 0.05; line 14 = 1_025.
+    mt_elderly_homeowner_or_renter_credit_net_household_income: 1_025
+    # Line 15 = 1_500; line 18 = 1_500; line 19 = 475; line 20 = 475; line 21
+    # = 100%; line 22 = 475. Without line 8, line 10 = 17_800, line 14 =
+    # 11_500 x 0.048 = 552 and the credit would be 948.
+    mt_elderly_homeowner_or_renter_credit: 475
+
+- name: Case 7, 2020 schedule line 8, a household member's compensation above the exclusion limit counts in full.
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 72
+        taxable_pension_income: 14_000
+        rent: 12_000
+        ssi: 0
+      person2:
+        age: 40
+        unemployment_compensation: 14_000
+        ssi: 0
+    tax_units:
+      tax_unit1:
+        members: [person1]
+      tax_unit2:
+        members: [person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_name: MT
+  output:
+    # The claimant's daughter files her own return. Of her 14_000, 10_200 is
+    # excluded and 14_000 - 10_200 = 3_800 is in her federal AGI. Line 1
+    # federal AGI 14_000 + 3_800 = 17_800; line 7 each return's 2020
+    # recovery rebate credit, 1_800 + 1_800 = 3_600; line 8 her excluded
+    # 10_200; line 10 = 31_600.
+    adjusted_gross_income_person: [14_000, 3_800]
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: [15_800, 15_800]
+    # Line 11 6_300; line 12 = 25_300; line 13 = 0.05; line 14 = 1_265.
+    mt_elderly_homeowner_or_renter_credit_net_household_income: [1_265, 0]
+    # Line 16 rent 12_000; line 17 = 1_800; line 18 = 1_800; line 19 = 535;
+    # line 20 = 535; line 21 = 100% (under 35_000); line 22 = 535. Without
+    # line 8, line 10 = 21_400, line 14 = 15_100 x 0.05 = 755 and the credit
+    # would be the 1_000 cap.
+    mt_elderly_homeowner_or_renter_credit: [535, 0]
+
+- name: Case 8, 2020 a dependent's compensation counts once, in their own gross income.
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 70
+        taxable_pension_income: 15_000
+        real_estate_taxes: 1_400
+        ssi: 0
+      person2:
+        age: 20
+        is_full_time_student: true
+        is_tax_unit_dependent: true
+        unemployment_compensation: 4_000
+        ssi: 0
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_name: MT
+  output:
+    # The claimant's grandson, a student, is her dependent. All of his 4_000
+    # is excluded from federal AGI, and his own gross income counts it in
+    # full, so nothing more is added for it. Line 1 federal AGI 15_000; line
+    # 7 the recovery rebate credit 1_800; line 8 his 4_000; line 10 = 20_800.
+    mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback: [0, 0]
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: [16_800, 4_000]
+    # Line 12 = 14_500; line 13 = 0.05; line 14 = 725.
+    mt_elderly_homeowner_or_renter_credit_net_household_income: [725, 0]
+    # Line 15 = 1_400; line 19 = 675; line 20 = 675; line 22 = 675.
+    mt_elderly_homeowner_or_renter_credit: [675, 0]
+
+- name: Case 9, 2021 taxable unemployment compensation counts once, in federal AGI.
+  period: 2021
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 66
+        taxable_pension_income: 16_000
+        unemployment_compensation: 9_000
+        real_estate_taxes: 1_500
+        ssi: 0
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    # No exclusion in 2021. Line 1 federal AGI 25_000; line 7 the 2021
+    # recovery rebate credit 1_400; line 10 = 26_400.
+    mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback: 0
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: 26_400
+    # Line 12 = 20_100; line 13 = 0.05; line 14 = 1_005.
+    mt_elderly_homeowner_or_renter_credit_net_household_income: 1_005
+    # Line 19 = 1_500 - 1_005 = 495; line 20 = 495; line 22 = 495.
+    mt_elderly_homeowner_or_renter_credit: 495
+
+- name: Case 10, 2024 Schedule 2EC line 14, unemployment compensation counts once.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 68
+        taxable_pension_income: 15_000
+        unemployment_compensation: 6_000
+        real_estate_taxes: 1_200
+        ssi: 0
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    # Line 5 pensions 15_000; line 14 unemployment compensation 6_000, all
+    # in federal AGI; line 18 = 21_000.
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: 21_000
+    # Line 20 = 8_400; line 21 = 0.039; line 22 = 327.60.
+    mt_elderly_homeowner_or_renter_credit_net_household_income: 327.60
+    # Line 27 = 1_200 - 327.60 = 872.40; line 28 = 872.40; line 30 = 872.40.
+    mt_elderly_homeowner_or_renter_credit: 872.40
diff --git a/policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/credits/elderly_homeowner_or_renter/mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback.yaml b/policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/credits/elderly_homeowner_or_renter/mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback.yaml
new file mode 100644
index 00000000000..21e4ee2e4f4
--- /dev/null
+++ b/policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/credits/elderly_homeowner_or_renter/mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback.yaml
@@ -0,0 +1,218 @@
+# Unemployment compensation that neither federal AGI nor a dependent's own
+# gross income counts. § 15-30-2337(9)(a) adds "all nontaxable income" to
+# federal AGI. In 2020, IRC 85(c) excluded up to 10_200 of unemployment
+# compensation from gross income when AGI without it was under 150_000.
+
+- name: Case 1, 2020 compensation under the exclusion limit is all nontaxable.
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 66
+        taxable_pension_income: 20_000
+        unemployment_compensation: 8_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    # AGI without the compensation is 20_000, under 150_000, and 8_000 is
+    # under 10_200, so none of it is in federal AGI.
+    taxable_unemployment_compensation: 0
+    mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback: 8_000
+
+- name: Case 2, 2020 compensation above the exclusion limit.
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 66
+        taxable_pension_income: 20_000
+        unemployment_compensation: 15_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    # 15_000 - 10_200 = 4_800 is in federal AGI; the excluded 10_200 is not.
+    taxable_unemployment_compensation: 4_800
+    mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback: 10_200
+
+- name: Case 3, 2020 income above the 150,000 cutoff gets no exclusion.
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 66
+        taxable_pension_income: 160_000
+        unemployment_compensation: 8_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    # AGI without the compensation is 160_000, not less than 150_000, so all
+    # of it is in federal AGI.
+    taxable_unemployment_compensation: 8_000
+    mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback: 0
+
+- name: Case 4, 2021 compensation is all taxable.
+  period: 2021
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 66
+        taxable_pension_income: 20_000
+        unemployment_compensation: 8_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    taxable_unemployment_compensation: 8_000
+    mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback: 0
+
+- name: Case 5, 2024 compensation is all taxable.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 66
+        taxable_pension_income: 20_000
+        unemployment_compensation: 8_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    taxable_unemployment_compensation: 8_000
+    mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback: 0
+
+- name: Case 6, 2020 joint return, the spouse who received the compensation.
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 68
+        taxable_pension_income: 20_000
+      person2:
+        age: 64
+        unemployment_compensation: 12_000
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_name: MT
+  output:
+    # 12_000 - 10_200 = 1_800 is in the spouse's share of federal AGI.
+    taxable_unemployment_compensation: [0, 1_800]
+    mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback: [0, 10_200]
+
+- name: Case 7, 2020 a dependent's compensation is already in their own gross income.
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 68
+        taxable_pension_income: 20_000
+        taxable_unemployment_compensation: 0
+      person2:
+        age: 64
+        unemployment_compensation: 8_000
+        taxable_unemployment_compensation: 1_200
+      person3:
+        age: 20
+        is_full_time_student: true
+        is_tax_unit_dependent: true
+        unemployment_compensation: 4_000
+        taxable_unemployment_compensation: 600
+    tax_units:
+      tax_unit:
+        members: [person1, person2, person3]
+    households:
+      household:
+        members: [person1, person2, person3]
+        state_name: MT
+  output:
+    # The taxable allocation is an input, so the case does not depend on how
+    # the federal exclusion is shared. With 1_200 of the spouse's 8_000 and
+    # 600 of the dependent's 4_000 taxable, the spouse's 8_000 counts as
+    # 1_200 in federal AGI plus 6_800 here. The dependent's 4_000 counts in
+    # full in their own gross income (dependent_gross_income), so none of it
+    # is added here.
+    adjusted_gross_income_person: [20_000, 1_200, 0]
+    dependent_gross_income: [0, 0, 4_000]
+    mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback: [0, 6_800, 0]
+    # Each person's compensation once. The head also carries the joint
+    # return's 2020 recovery rebate credit, 1_200 x 2 + 600 x 2 = 3_600.
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: [23_600, 8_000, 4_000]
+
+- name: Case 8, a person recorded as both a dependent and the head.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 40
+        is_tax_unit_dependent: true
+        unemployment_compensation: 5_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    # Federal AGI counts people who are not dependents and
+    # dependent_gross_income people who are not the head or spouse, so
+    # neither counts this person's compensation; all of it is added here.
+    adjusted_gross_income_person: 0
+    dependent_gross_income: 0
+    mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback: 5_000
+    # The 2023 list carries it into gross household income.
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: 5_000
+
+- name: Case 9, the same person in 2016 under the 2009 list.
+  period: 2016
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 40
+        is_tax_unit_dependent: true
+        unemployment_compensation: 5_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback: 5_000
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: 5_000
diff --git a/policyengine_us/tests/test_mt_elderly_credit_nontaxable_income.py b/policyengine_us/tests/test_mt_elderly_credit_nontaxable_income.py
new file mode 100644
index 00000000000..be9b2281fed
--- /dev/null
+++ b/policyengine_us/tests/test_mt_elderly_credit_nontaxable_income.py
@@ -0,0 +1,293 @@
+"""Invariant tests: disability benefits and unemployment compensation in the
+Montana elderly homeowner/renter credit.
+
+MCA 15-30-2337(9)(a) counts federal adjusted gross income "plus all
+nontaxable income", and (4) counts "all income received by all individuals
+of a household". 2024 Schedule 2EC line 14 counts "the total of unemployment
+compensation received during the year"; the 2014-2023 instructions list
+disability benefits. The model leaves employment disability benefits out of
+federal AGI, and in 2020 IRC 85(c) excluded up to 10_200 of unemployment
+compensation from it. Federal AGI counts the taxable part of a filer's
+compensation and a dependent's own gross income all of a dependent's.
+
+For a claimant aged 66 (taxable pension, unemployment compensation,
+disability benefits, property tax) living with one other adult (unemployment
+compensation, disability benefits), in 2019, 2020, 2021 and 2024, in three
+arrangements:
+
+  dependent: one return, the other adult a 20-year-old student dependent;
+  own_return: two returns, the other adult (45) filing their own;
+  joint: one joint return, the other adult (60) the claimant's spouse;
+
+over a grid of amounts that puts the compensation under and over the 10_200
+limit, and income under and over the 150_000 cutoff:
+
+1. The household's gross household income is the pension plus every
+   member's unemployment compensation and disability benefits, each once,
+   plus the refundable credits the household received (read from the model;
+   no one has earnings, so these are the recovery rebate credits).
+2. The credit equals an independent reading of the schedule (standard
+   exclusion, Household Income Reduction Table, cap, Credit Multiplier
+   Table), lies between zero and the cap, and is zero at 45_000 or more.
+3. More unemployment compensation or disability benefits never raise the
+   credit while the refundable credits stay the same.
+
+The YAML cases pin worked examples from each year's form. This test adds
+what they cannot: every arrangement and year at once against a reference
+written from the statute rather than the model's income paths, so a double
+count through federal AGI, dependent_gross_income or the 2020 exclusion
+shows up. It builds one vectorized Simulation.
+"""
+
+import gc
+import itertools
+
+import numpy as np
+import pytest
+
+from policyengine_us import Simulation
+
+YEARS = [2019, 2020, 2021, 2024]
+ARRANGEMENTS = ["dependent", "own_return", "joint"]
+PENSIONS = [12_000, 160_000]
+CLAIMANT_UC = [0, 6_000, 15_000]
+MEMBER_UC = [0, 4_000, 12_000]
+CLAIMANT_DISABILITY = [0, 3_000]
+MEMBER_DISABILITY = [0, 5_000]
+PROPERTY_TAX = 1_500
+INCOME_LIMIT = 45_000
+TOLERANCE = 0.01
+# Standard exclusion and cap: $6,300 and $1,000 through 2021; HB 191 (2021)
+# raised them to $12,600 and $1,150 from 2022.
+EXCLUSION = {2019: 6_300, 2020: 6_300, 2021: 6_300, 2024: 12_600}
+CAP = {2019: 1_000, 2020: 1_000, 2021: 1_000, 2024: 1_150}
+# Household Income Reduction Table: lower bounds and rates.
+REDUCTION_TABLE = [
+    (0, 0),
+    (2_000, 0.006),
+    (3_000, 0.016),
+    (4_000, 0.024),
+    (5_000, 0.028),
+    (6_000, 0.032),
+    (7_000, 0.035),
+    (8_000, 0.039),
+    (9_000, 0.042),
+    (10_000, 0.045),
+    (11_000, 0.048),
+    (12_000, 0.05),
+]
+# Credit Multiplier Table: lower bounds of gross household income.
+MULTIPLIER_TABLE = [
+    (0, 1),
+    (35_000, 0.4),
+    (37_501, 0.3),
+    (40_001, 0.2),
+    (42_501, 0.1),
+    (45_000, 0),
+]
+CASES = [
+    dict(
+        arrangement=arrangement,
+        pension=pension,
+        claimant_uc=claimant_uc,
+        member_uc=member_uc,
+        claimant_disability=claimant_disability,
+        member_disability=member_disability,
+    )
+    for (
+        arrangement,
+        pension,
+        claimant_uc,
+        member_uc,
+        claimant_disability,
+        member_disability,
+    ) in itertools.product(
+        ARRANGEMENTS,
+        PENSIONS,
+        CLAIMANT_UC,
+        MEMBER_UC,
+        CLAIMANT_DISABILITY,
+        MEMBER_DISABILITY,
+    )
+]
+
+
+def build_situation():
+    def every_year(value):
+        return {year: value for year in YEARS}
+
+    people, tax_units, marital_units, households = {}, {}, {}, {}
+    for i, c in enumerate(CASES):
+        claimant, member = f"claimant_{i}", f"member_{i}"
+        arrangement = c["arrangement"]
+        people[claimant] = {
+            "age": every_year(66),
+            "taxable_pension_income": every_year(c["pension"]),
+            "unemployment_compensation": every_year(c["claimant_uc"]),
+            "disability_benefits": every_year(c["claimant_disability"]),
+            "real_estate_taxes": every_year(PROPERTY_TAX),
+            "ssi": every_year(0),
+            "is_tax_unit_dependent": every_year(False),
+        }
+        people[member] = {
+            "age": every_year(
+                {"dependent": 20, "own_return": 45, "joint": 60}[arrangement]
+            ),
+            "is_full_time_student": every_year(arrangement == "dependent"),
+            "unemployment_compensation": every_year(c["member_uc"]),
+            "disability_benefits": every_year(c["member_disability"]),
+            "ssi": every_year(0),
+            "is_tax_unit_dependent": every_year(arrangement == "dependent"),
+        }
+        if arrangement == "own_return":
+            tax_units[f"tax_unit_{i}"] = {"members": [claimant]}
+            tax_units[f"tax_unit_{i}_member"] = {"members": [member]}
+        else:
+            tax_units[f"tax_unit_{i}"] = {"members": [claimant, member]}
+        if arrangement == "joint":
+            marital_units[f"marital_unit_{i}"] = {"members": [claimant, member]}
+        else:
+            marital_units[f"marital_unit_{i}"] = {"members": [claimant]}
+            marital_units[f"marital_unit_{i}_member"] = {"members": [member]}
+        households[f"household_{i}"] = {
+            "members": [claimant, member],
+            "state_code": every_year("MT"),
+        }
+    return {
+        "people": people,
+        "tax_units": tax_units,
+        "marital_units": marital_units,
+        "households": households,
+    }
+
+
+@pytest.fixture(scope="module")
+def results():
+    """Household totals by year: gross household income, the credit, and
+    the refundable credits received."""
+    simulation = Simulation(situation=build_situation())
+
+    def by_household(variable, year):
+        return np.asarray(simulation.calculate(variable, year, map_to="household"))
+
+    results = {
+        year: {
+            "gross_household_income": by_household(
+                "mt_elderly_homeowner_or_renter_credit_gross_household_income",
+                year,
+            ),
+            "credit": by_household("mt_elderly_homeowner_or_renter_credit", year),
+            "refundable_credits": by_household(
+                "mt_elderly_homeowner_or_renter_credit_federal_refundable_credits",
+                year,
+            )
+            + by_household("mt_refundable_credits_before_renter_credit", year),
+        }
+        for year in YEARS
+    }
+    # Keep only the arrays: free the simulation before the rest of the
+    # process's tests run.
+    del simulation
+    gc.collect()
+    return results
+
+
+def lookup(table, amount):
+    rate = 0
+    for lower, value in table:
+        if amount >= lower:
+            rate = value
+    return rate
+
+
+def expected_credit(year, gross_household_income):
+    household_income = max(gross_household_income - EXCLUSION[year], 0)
+    net_household_income = household_income * lookup(REDUCTION_TABLE, household_income)
+    uncapped = max(PROPERTY_TAX - net_household_income, 0)
+    return min(uncapped, CAP[year]) * lookup(MULTIPLIER_TABLE, gross_household_income)
+
+
+def tolerance(amount):
+    return max(TOLERANCE, 8 * float(np.spacing(np.float32(abs(amount)))))
+
+
+@pytest.mark.parametrize("year", YEARS)
+def test_each_amount_counts_once(results, year):
+    r = results[year]
+    for i, c in enumerate(CASES):
+        expected = (
+            c["pension"]
+            + c["claimant_uc"]
+            + c["member_uc"]
+            + c["claimant_disability"]
+            + c["member_disability"]
+            + r["refundable_credits"][i]
+        )
+        assert r["gross_household_income"][i] == pytest.approx(
+            expected, abs=tolerance(expected)
+        ), (year, c)
+
+
+@pytest.mark.parametrize("year", YEARS)
+def test_credit_follows_the_schedule(results, year):
+    r = results[year]
+    for i, c in enumerate(CASES):
+        ghi = float(r["gross_household_income"][i])
+        credit = float(r["credit"][i])
+        tol = tolerance(ghi)
+        assert credit == pytest.approx(expected_credit(year, ghi), abs=tol), (
+            year,
+            c,
+        )
+        assert -tol <= credit <= CAP[year] + tol, (year, c)
+        if ghi >= INCOME_LIMIT:
+            assert credit == 0, (year, c)
+
+
+@pytest.mark.parametrize("year", YEARS)
+def test_more_income_never_raises_the_credit(results, year):
+    r = results[year]
+    index = {tuple(sorted(c.items())): i for i, c in enumerate(CASES)}
+    axes = {
+        "claimant_uc": CLAIMANT_UC,
+        "member_uc": MEMBER_UC,
+        "claimant_disability": CLAIMANT_DISABILITY,
+        "member_disability": MEMBER_DISABILITY,
+    }
+    compared = 0
+    for i, c in enumerate(CASES):
+        for key, values in axes.items():
+            position = values.index(c[key])
+            if position + 1 == len(values):
+                continue
+            j = index[tuple(sorted({**c, key: values[position + 1]}.items()))]
+            if r["refundable_credits"][j] != r["refundable_credits"][i]:
+                continue
+            compared += 1
+            tol = tolerance(r["gross_household_income"][j])
+            assert r["credit"][j] <= r["credit"][i] + tol, (year, c, key)
+    assert compared > 0
+
+
+def test_worked_example(results):
+    """2020 Elderly Homeowner/Renter Credit Schedule, own_return arrangement:
+    the claimant's pension 12_000 and unemployment compensation 6_000, all
+    excluded from federal AGI; the other adult's 12_000 of compensation,
+    1_800 of it in federal AGI; each return's recovery rebate credit 1_800.
+    Line 1 = 12_000 + 1_800; line 7 = 3_600; line 8 = 6_000 + 10_200; line
+    10 = 33_600; line 12 = 27_300; line 14 = 1_365; line 19 = 135; line 22 =
+    135 at the 100% multiplier."""
+    i = CASES.index(
+        dict(
+            arrangement="own_return",
+            pension=12_000,
+            claimant_uc=6_000,
+            member_uc=12_000,
+            claimant_disability=0,
+            member_disability=0,
+        )
+    )
+    r = results[2020]
+    assert r["refundable_credits"][i] == pytest.approx(3_600, abs=TOLERANCE)
+    assert r["gross_household_income"][i] == pytest.approx(33_600, abs=TOLERANCE)
+    assert r["credit"][i] == pytest.approx(135, abs=TOLERANCE)
diff --git a/policyengine_us/variables/gov/states/mt/tax/income/credits/mt_elderly_homeowner_or_renter/mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback.py b/policyengine_us/variables/gov/states/mt/tax/income/credits/mt_elderly_homeowner_or_renter/mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback.py
new file mode 100644
index 00000000000..407163fa0d5
--- /dev/null
+++ b/policyengine_us/variables/gov/states/mt/tax/income/credits/mt_elderly_homeowner_or_renter/mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback.py
@@ -0,0 +1,48 @@
+from policyengine_us.model_api import *
+
+
+class mt_elderly_homeowner_or_renter_credit_unemployment_compensation_addback(Variable):
+    value_type = float
+    entity = Person
+    label = "Montana elderly homeowner/renter credit unemployment compensation add-back"
+    documentation = (
+        "Unemployment compensation a household member received that neither "
+        "federal adjusted gross income nor a dependent's own gross income "
+        "counts. For a filer this is the part excluded from 2020 federal "
+        "gross income under IRC 85(c), which gross household income counts as "
+        "nontaxable income. For a person recorded as both a dependent and the "
+        "head or spouse, whom neither income path counts, it is all of their "
+        "compensation."
+    )
+    unit = USD
+    definition_period = YEAR
+    defined_for = StateCode.MT
+    reference = (
+        # § 15-30-2337(9)(a): federal adjusted gross income "plus all
+        # nontaxable income"
+        "https://mca.legmt.gov/bills/mca/title_0150/chapter_0300/part_0230/section_0370/0150-0300-0230-0370.html",
+        # IRC 85(c), added by ARPA § 9042: up to $10,200 of 2020
+        # unemployment compensation excluded from gross income
+        "https://www.law.cornell.edu/uscode/text/26/85#c",
+        # 2020 Form 2 instructions, line 8: "Enter all items of income
+        # received by the members of the household that were not reported on
+        # lines 1 through 7"
+        "https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2020_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=45",
+        # 2024 Schedule 2EC, line 14: "Enter the total of unemployment
+        # compensation received during the year"
+        "https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2024_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=48",
+    )
+
+    def formula(person, period, parameters):
+        # Gross household income counts all the unemployment compensation a
+        # member received, taxable or not. Federal AGI already counts the
+        # taxable part of a filer's (irs_gross_income counts people who are
+        # not dependents), and a dependent's own gross income counts all of a
+        # dependent's (dependent_gross_income counts people who are not the
+        # head or spouse, without the IRC 85(c) exclusion). Add the rest.
+        received = max_(0, person("unemployment_compensation", period))
+        is_dependent = person("is_tax_unit_dependent", period)
+        head_or_spouse = person("is_tax_unit_head_or_spouse", period)
+        taxable = max_(0, person("taxable_unemployment_compensation", period))
+        counted = where(is_dependent, ~head_or_spouse * received, taxable)
+        return max_(received - counted, 0)