What Are North Dakota’s Income Tax Rates?

North Dakota levies a state income tax on resident and non-resident income earned within its borders. A person’s total tax is determined by their income, filing status, and residency.

North Dakota’s Income Tax Rates and Brackets

For the 2024 tax year, filed in 2025, North Dakota has a progressive tax system with three brackets: 0%, 1.95%, and 2.5%. This structure means different portions of a person’s income are taxed at different rates. The income thresholds for these brackets vary based on the taxpayer’s filing status.

For single filers, the first $47,150 of taxable income is taxed at 0%. Income between $47,151 and $238,200 is taxed at a rate of 1.95%, while taxable income exceeding $238,200 is subject to the 2.5% rate. This marginal rate system ensures that only the income within a specific bracket is taxed at that bracket’s rate.

For those married and filing a joint return, the 0% rate applies to the first $78,775 of taxable income. The 1.95% rate is applied to income between $78,776 and $275,100, and the 2.5% rate applies to income over $275,100. Similar bracket adjustments exist for those filing as Head of Household.

Filing Requirements in North Dakota

The requirement to file a North Dakota state income tax return is linked to federal filing obligations. If you are required to file a federal income tax return, you must also file a North Dakota return if you have any gross income from North Dakota sources. This rule applies to full-year residents, part-year residents, and nonresidents.

Full-year residents are taxed on all income earned, regardless of where it was earned. Part-year residents must file if they had any income from any source while a resident, or if they had North Dakota-sourced income while a nonresident. For nonresidents, this includes wages, self-employment income, and rental income from property located in the state.

The state automatically grants a six-month extension to file if a federal extension is filed, but this is an extension of time to file, not to pay tax owed.

Calculating North Dakota Taxable Income

The calculation of North Dakota taxable income begins with your Federal Adjusted Gross Income (AGI). This starting point ensures consistency between federal and state tax bases before state-specific adjustments are made. From the AGI, taxpayers can subtract either the state’s standard deduction or their total itemized deductions.

North Dakota’s standard deduction amounts are tied to the federal standard deduction. For the 2024 tax year, the standard deduction for a single individual is $14,600, for married couples filing jointly is $29,200, and for head of household is $21,900. Taxpayers may choose to itemize deductions on their state return if their total itemized deductions exceed their applicable standard deduction amount.

After determining the deduction, certain adjustments may be necessary. North Dakota allows for subtractions from federal AGI, such as the full exemption of Social Security benefits and a potential 40% exclusion for long-term capital gains. There are few state-specific additions to income.

Available North Dakota Tax Credits

After calculating tax liability, taxpayers may be able to reduce their final tax bill through various tax credits. These credits are applied directly against the tax owed. North Dakota offers several credits targeted at specific activities and populations.

Some of the most common credits include:

• A credit for income taxes paid to another state, available to full-year residents who earned income in another state and paid tax to that jurisdiction, preventing double taxation.
• The family member care credit, for a percentage of qualified expenses paid to care for a qualifying family member, with a maximum credit of $2,000 per member and $4,000 total per return.
• Charitable contributions to qualified endowment funds.
• Contributions to nonprofit private schools.
• A credit for employing individuals with developmental disabilities or chronic mental illness.