North Dakota Income
Tax Rates & Rules

North Dakota uses three individual income tax rates in 2026: 0 percent, 1.95 percent and 2.50 percent. The bracket thresholds depend on filing status and are published in the 2026 Form ND-1ES estimated-tax instructions. North Dakota taxable income begins with federal taxable income then applies state additions and subtractions.

North Dakota Income Tax Brackets for 2026

North Dakota's 2026 rate schedule has a zero-percent bracket followed by 1.95 percent and 2.50 percent brackets.

These are marginal brackets. Income in the zero-percent bracket does not become taxable at 1.95 percent when a taxpayer crosses the first threshold. Only the portion within each higher bracket is taxed at the higher marginal rate.

How North Dakota Taxable Income Is Calculated

North Dakota taxable income generally starts with federal taxable income then changes through North Dakota additions and subtractions before the state rate schedule is applied.

• Estimate or determine federal taxable income.
• Add North Dakota adjustments required by state law.
• Subtract North Dakota adjustments allowed by state law.
• Determine North Dakota taxable income.
• Apply the 2026 rate schedule for the taxpayer's filing status.
• For a nonresident or part-year resident, apply the North Dakota income ratio under Schedule ND-1NR rules.
• Subtract eligible credits, withholding and estimated payments to determine the final amount due or refund.

The 2026 Form ND-1ES specifically instructs taxpayers to estimate federal taxable income using the 2026 federal Form 1040-ES then use the North Dakota additions and subtractions referenced in the current Form ND-1 instructions.

North Dakota Residents and Credit for Tax Paid to Another State

A North Dakota resident is generally subject to North Dakota income tax under resident rules and may be eligible for a credit when the same income is taxed by another state.

The Office of State Tax Commissioner explains that a North Dakota resident who works in another state may have to file there and can qualify for Schedule ND-1CR when tax paid to the other state is eligible for a North Dakota credit.

This credit is different from reciprocity. A resident credit addresses qualifying double taxation while a reciprocal wage agreement can prevent the other state from taxing qualifying wages in the first place.

North Dakota Has Wage Reciprocity With Minnesota and Montana

North Dakota has individual income tax reciprocity with Minnesota and Montana for qualifying wage and salary income.

A North Dakota resident working in Minnesota or Montana can generally have qualifying wages taxed only by North Dakota. Likewise, qualifying Minnesota or Montana residents working in North Dakota can use the appropriate reciprocity exemption process so North Dakota withholding is not taken from covered wages.

Reciprocity generally applies to employee compensation rather than every type of income. Rental income, business income, property income and gambling income can still be sourced to the state where the activity or property is located.

Nonresidents Pay Tax on North Dakota-Source Income

A North Dakota nonresident is generally taxed on income sourced to North Dakota, including compensation for services physically performed in the state unless an exemption applies.

• Wages, salaries, tips and fees for services performed in North Dakota can be North Dakota-source income.
• Rents, royalties or gains from North Dakota tangible property can be North Dakota-source income.
• Business income from a trade or business carried on in North Dakota can be taxable to a nonresident.
• North Dakota gambling income can be North Dakota-source income.
• Certain interest, dividends, pensions and intangible-property income are generally excluded from nonresident North Dakota-source income unless connected with a North Dakota trade or business.

Does North Dakota Tax Remote Workers?

North Dakota generally looks to residency and the physical source of services when deciding whether remote wages are subject to state income tax.

A North Dakota resident working remotely for an out-of-state employer generally remains subject to North Dakota income tax under resident rules. A nonresident working entirely outside North Dakota for a North Dakota employer generally does not have North Dakota-source wages merely because the employer is located in the state, assuming the services are not performed in North Dakota.

Hybrid workers should track days worked in North Dakota. Minnesota and Montana residents should also consider the reciprocity rules when their work would otherwise create North Dakota wage income.

How Part-Year Residents Are Taxed

A part-year resident generally combines resident-period income with North Dakota-source income from the nonresident portion of the year then uses Schedule ND-1NR to determine the taxable North Dakota share.

The 2026 estimated-tax form uses a North Dakota income ratio for full-year nonresidents and part-year residents. The ratio compares North Dakota-source income with federal adjusted gross income after specified adjustments then applies that percentage to the tax calculated under the 2026 rate schedule.

Who Must File a North Dakota Income Tax Return?

North Dakota filing requirements depend on federal filing status, residency and whether the taxpayer has North Dakota-source income.

The state's individual income tax page explains that residents, part-year residents and nonresidents can have a North Dakota filing requirement when they are required to file a federal return and receive income reportable to North Dakota. As of August 25, 2026, the full 2026 Form ND-1 return booklet has not yet been released, but the 2026 estimated-tax form and 2026 withholding instructions are available.

North Dakota Withholding Is Not the Same as Annual Tax

North Dakota wage withholding is a prepayment toward annual income tax and should not be confused with the final tax generated by the 2026 brackets.

North Dakota relies on the federal Form W-4 for the state withholding calculation. The state publishes separate 2026 withholding tables, so the amount withheld from one paycheck can differ from the taxpayer's final effective state income tax rate.

For a paycheck-level estimate, the North Dakota paycheck calculator is more appropriate than applying the annual brackets directly to one pay period.

Use Actual Withholding in Payroll Records

The annual income tax calculation should not be used to invent or reconstruct paycheck withholding after the fact.

Once payroll is complete, the North Dakota pay stub generator can organize genuine wages and deductions into an itemized employee record. For broader lawful payroll documentation, an online paystub should be created only from verified employment and payment information.

Tax Information and Responsible Use

This page explains state income tax concepts for general informational, payroll and lawful recordkeeping purposes.

Tax liability can vary by residency, filing status, income source, deductions, credits and tax year. Use the final 2026 state return instructions when preparing an actual return. Online PayStub should be used only with genuine employment, earnings, withholding and payment information. Do not use generated payroll records to fabricate employment, inflate income or misrepresent payment history.