Key Tax Facts: North Dakota
- Flat 2.5% rate - one of the lowest income tax rates in the U.S.
- Social Security may be partially exempt depending on income
- Military pay earned out of state is exempt
- No local income taxes beyond the state rate
Estimate Your 2026 Federal and North Dakota State Income Tax
North Dakota State Income Tax Overview
North Dakota has the second-lowest top income tax rate in the country among states that tax wages. Income up to $48,475 for single filers is untaxed entirely, then 1.95% applies up to $244,825, with a 2.5% top rate above that. A 2023 reform eliminated the bottom brackets outright, removing most lower-income filers from the income tax rolls. North Dakota uses the federal taxable income starting point, so the federal standard deduction of $15,000 for single filers and $30,000 for joint filers carries through. Social Security benefits are exempt for filers below income thresholds, and North Dakota has no state estate or inheritance tax.
What Is Different About North Dakota's Income Tax
Deductions and exemptions
North Dakota starts from federal taxable income, so the federal standard or itemized deduction applies automatically. Under 2023 legislation, taxable income up to $48,475 for single filers and $80,975 for joint filers is taxed at 0% for 2025, and the remaining income is taxed at 1.95% and 2.5%, giving the state the lowest top rate of any state that taxes wages.
Credits worth knowing
Credits include a credit for taxes paid to other states, a marriage penalty credit for joint filers, and credits for long-term care insurance premiums and contributions to the state's college savings plan. There is no state earned income credit.
Retirement, capital gains, and other income
Social Security became exempt in 2021, and military retirement pay is fully exempt. Pensions, 401(k), and IRA withdrawals are taxed at the low regular rates. North Dakota excludes 40% of net long-term capital gains from taxable income.
Rules summarized from the North Dakota Office of State Tax Commissioner guidance for tax year 2026. Amounts that index annually are described in general terms; confirm the current figure on the official form instructions.
North Dakota Income Tax Brackets (2026) projected
These are the North Dakota state income tax brackets for tax year 2026. North Dakota applies the same brackets to all filing statuses, carried forward from 2025 pending official 2026 figures. Only the income within each bracket is taxed at that rate -- not your entire income.
| Taxable Income | Tax Rate |
|---|---|
| $0 - $48,475 | 0% |
| $48,475 - $244,825 | 1.95% |
| Over $244,825 | 2.5% |
Source: North Dakota Office of State Tax Commissioner. North Dakota applies these brackets to all filing statuses.
What a North Dakota Resident Actually Pays: A Worked Example
Your effective tax rate is almost always lower than your top bracket. Here is how the math works for a single filer earning $65,000.
Where North Dakota Stands Among the 50 States
North Dakota's top rate of 2.5% ranks #41 of the 41 states that tax wages -- among the ten lowest of the states that levy the tax at all. The median top rate across those 41 states is 5.2%, so North Dakota is below the middle of the pack. It is one of 27 states with a graduated schedule, using 3 brackets; the top rate starts at $244,825 of taxable income, and the lowest bracket ends at $48,475.
On sales tax the picture is similar: North Dakota's combined state and average local rate of 6.96% ranks #27 of 50, against a national median of 7.00%.
North Dakota State Tax at Five Income Levels (2026, single filer)
| Taxable income | North Dakota tax | Effective rate | Marginal rate |
|---|---|---|---|
| $40,000 | $0 | 0.00% | 0% |
| $65,000 | $322 | 0.50% | 1.95% |
| $100,000 | $1,005 | 1.00% | 1.95% |
| $150,000 | $1,980 | 1.32% | 1.95% |
| $250,000 | $3,958 | 1.58% | 2.5% |
Brackets applied directly to the taxable-income figure shown, before North Dakota-specific deductions, exemptions, or credits. Federal tax is separate and comes on top of every row.
North Dakota vs. Its Neighbors on $75,000 of Taxable Income
A North Dakota resident with $75,000 of taxable income pays about $517 in state income tax. Of North Dakota's 3 neighboring states, 1 would tax that income less and 2 would tax it more.
| State | Structure | Tax on $75,000 | Top rate | Sales tax |
|---|---|---|---|---|
| North Dakota (you) | Graduated | $517 | 2.5% | 6.96% |
| South Dakota | No income tax | $0 | None | 6.11% |
| Montana | Rate to 5.9% | $4,172 | 5.9% | 0% |
| Minnesota | Rate to 9.85% | $4,628 | 9.85% | 7.49% |
Frequently Asked Questions -- North Dakota Income Tax
Does North Dakota have a state income tax?
Yes. North Dakota imposes a state income tax with a top marginal rate of 2.5%. This is separate from your federal income tax obligation.
What is the North Dakota income tax rate for 2026?
North Dakota uses a graduated income tax system with rates from 0% to 2.5%. Only the income within each bracket is taxed at that bracket's rate -- not your entire income.
Do I have to file a North Dakota state tax return?
Most full-year North Dakota residents with income above the state filing threshold must file a state return. Check the North Dakota Office of State Tax Commissioner for current thresholds and requirements.
How accurate is this estimate?
The federal figure uses the official IRS 2026 brackets and standard deduction. The North Dakota figure applies the 2026 single-filer rate schedule to the same taxable income; it does not model North Dakota-specific deductions, exemptions, credits, or local income taxes, so treat it as a planning number and confirm with the North Dakota Office of State Tax Commissioner or a tax professional before filing.
How does North Dakota compare with nearby states?
On $75,000 of taxable income, North Dakota collects about $517. South Dakota collects $0, Montana collects $4,172, Minnesota collects $4,628. See the comparison table above.
Where does North Dakota rank on state income tax?
North Dakota's top rate of 2.5% ranks #41 of the 41 states with an income tax, against a median top rate of 5.2%. Its combined sales tax of 6.96% ranks #27 of 50.
Does this calculator include federal income tax?
Yes. It estimates your 2026 federal income tax using the official IRS 2026 brackets, then applies the North Dakota rate schedule to the same taxable income and shows both figures plus the combined total.
Where can I find official North Dakota tax forms?
Official forms, instructions, and filing guidance are available at the North Dakota Office of State Tax Commissioner.
What is the sales tax rate in North Dakota?
North Dakota's combined state and average local sales tax rate is 6.96%. This is separate from income tax and applies to most retail purchases -- use our sales tax calculator to check a specific purchase.
When are North Dakota 2026 state taxes due?
2026 taxes are generally filed in 2027. The North Dakota filing deadline is April 15, 2027, the same as the federal deadline.
Understanding Your North Dakota Tax Estimate
Your results combine two separate bills: federal tax owed to the IRS, and North Dakota state tax owed to the North Dakota Office of State Tax Commissioner. The state return is filed separately from your federal Form 1040, with a state filing deadline of April 15. For the mechanics of how bracket math actually works -- why your effective rate is almost always lower than your top bracket -- see our marginal vs. effective tax rate guide.
Lowering Your North Dakota Bill
Pre-tax retirement contributions reduce your federal and North Dakota taxable income in the same move -- see our 401(k) contribution limits and HSA limits guides for the current caps. Beyond that, North Dakota-specific credits and deductions that don't exist at the federal level are listed at the North Dakota Office of State Tax Commissioner -- worth checking, since these are easy to miss if you only look at federal guidance.
Combined Sales + Income Tax Picture
North Dakota's combined state-plus-average-local sales tax rate is 6.96%. If you're self-employed, that's an added layer on top of income tax -- our self-employment tax calculator covers the SE-specific piece separately.
Disclaimer: Estimates for educational purposes only. State tax results are approximations based on published bracket data and do not account for all deductions, credits, exemptions, local taxes, or individual situations. Not tax, legal, or financial advice. Consult the North Dakota Office of State Tax Commissioner or a qualified tax professional for guidance specific to your situation.