A theoretical investigation is conducted to describe optoelectronic properties of Fe-doped montmorillonite nanoclay under spin states of low spin (LS), intermediate spin (IS), and high spin (HS). Ground state electronic properties are studied using spin-polarized density functional theory calculations. The nonradiative and radiative relaxation channels of charge carriers are studied by computing nonadiabatic couplings (NACs) using an "on-the-fly" approach from adiabatic molecular dynamics trajectories. The NACs are further processed using a reduced density matrix approach with the Redfield formalism. The computational results are presented for electronic density of states, absorption spectra, charge carrier dynamics, and photoluminescence (PL) by comparing various spin multiplicities. Results on spin α and spin β components are independent and quite different because of the partial occupation of Fe 3d states. Overall, HS is the most stable with the largest Fe-O distances. One finds different nonradiative relaxation pathways in space and on the time scale for electrons and holes. The Redfield PL reveals obvious Fe 3d-3d transitions for LS and IS.