North Dakota made a dramatic tax cut in 2023–2024, effectively eliminating income tax for most residents and setting a flat 2.5% rate for higher earners. It now has one of the lightest income tax burdens in the country.
Quick answer: Single filers earning under ~$44,725 pay $0 in North Dakota state income tax. Above that threshold, the rate is a flat 2.5%. Social Security is fully exempt.
North Dakota Income Tax Brackets 2026
| Filing Status | Income Threshold | Rate |
|---|---|---|
| Single | $0 – $44,725 | 0% |
| Single | Over $44,725 | 2.5% |
| Married Filing Jointly | $0 – $74,750 | 0% |
| Married Filing Jointly | Over $74,750 | 2.5% |
| Head of Household | $0 – $59,725 | 0% |
| Head of Household | Over $59,725 | 2.5% |
The zero-bracket thresholds are linked to the federal standard deduction and personal exemption levels and may adjust slightly for 2026. Verify at nd.gov/tax.
Worked Example — North Dakota Tax on $75,000 Income (Single)
| Item | Amount |
|---|---|
| Gross income | $75,000 |
| Zero-bracket threshold (single) | −$44,725 |
| Taxable income in North Dakota | $30,275 |
| North Dakota flat tax (2.5%) | $757 |
| Effective North Dakota rate | 1.0% |
On a $75,000 salary, a single North Dakota resident pays just $757 in state income tax — an effective rate of about 1%, making it one of the lowest state tax burdens in the country.
What North Dakota Taxes and Exempts
Exempt from North Dakota Income Tax
- Social Security benefits — fully exempt (since 2021)
- Income below the zero-bracket threshold — 0% for most residents
- Military retirement pay — fully exempt for veterans
Taxed by North Dakota at 2.5%
- Wages and salaries above the zero-bracket threshold
- 401(k) and IRA withdrawals
- Pension income (with limited military retirement exception)
- Capital gains (no preferential rate — taxed as ordinary income)
- Business and self-employment income
North Dakota Retirement Tax Profile
North Dakota is one of the most retirement-friendly states for income tax purposes:
- Social Security: Fully exempt — no clawback based on income
- Military retirement: Fully exempt
- Other pension/IRA income: Taxed at 2.5% — one of the lowest rates of any state that taxes this income
- Zero-bracket: Retirees with combined Social Security + modest pension may fall entirely under the $44,725 threshold
A married couple living on $60,000 of combined Social Security ($40,000) and IRA withdrawals ($20,000) would owe $0 in North Dakota state income tax — Social Security is exempt, and the remaining $20,000 falls under the $74,750 married threshold.
Who Must File a North Dakota Return
You are required to file if:
- You are a full-year resident whose North Dakota adjusted gross income exceeds your zero-bracket threshold
- You are a part-year resident or nonresident with any North Dakota-source income
- You had North Dakota income tax withheld and are filing to claim a refund
Filing Details
- Filing deadline: April 15, 2026
- Extension: Automatic extension to October 15 if a federal extension is filed (tax still due April 15)
- Estimated payments: Required if you expect to owe more than $500
- Forms: ND-1 (residents); ND-1NR (nonresidents/part-year)
- E-file: Available at nd.gov/tax
North Dakota vs. Neighboring States
| State | Income Tax Rate |
|---|---|
| North Dakota | 0% / 2.5% flat |
| South Dakota | 0% (no income tax) |
| Minnesota | 5.35%–9.85% graduated |
| Montana | 4.7%–5.9% graduated |
| Wyoming | 0% (no income tax) |
North Dakota’s 2.5% rate sits far below Minnesota’s top rate of 9.85%, making it a notable tax contrast for border residents.
Related Guides
- 9 States With No Income Tax 2026
- Federal Income Tax Brackets 2026
- State Income Tax Rates 2026 — All 50 States
- Minnesota Income Tax Guide 2026
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