North Dakota residents need to understand their state's tax system, which has undergone recent changes to remain competitive with neighboring states while funding state services.

North Dakota State Income Tax Rate: 1.1%-2.9% | Calculator

Best Answer

Sarah Chen, Payroll Tax Analyst

Workers who receive regular paychecks with North Dakota state tax withheld

How North Dakota's state income tax rates work

North Dakota has one of the most taxpayer-friendly income tax systems in the United States, with rates ranging from just 1.1% to 2.9% for 2026. The state uses a progressive system, but even the highest earners pay less than 3%.

The tax brackets for single filers in 2026 are:

1.1% on income up to $41,775

2.04% on income from $41,776 to $101,050

2.27% on income from $101,051 to $206,200

2.64% on income from $206,201 to $445,850

2.9% on income over $445,850

Example: $60,000 salary calculation

For someone earning $60,000 in North Dakota:

First $41,775: $459.53 (1.1% rate)

Remaining $18,225 ($41,776-$60,000): $371.79 (2.04% rate)

Total North Dakota state tax: $831.32 annually

With North Dakota's standard deduction of $13,850 for single filers in 2026:

Taxable income: $60,000 - $13,850 = $46,150

State tax on $46,150: $507.65 (about $19.52 per biweekly paycheck)

Effective tax rate: Less than 1% of gross income

Why North Dakota's taxes are so low

North Dakota's low income tax rates are possible due to significant oil revenue from the Bakken formation. The state's oil and gas production generates substantial tax revenue, allowing lawmakers to keep income taxes minimal while maintaining government services.

Comparison with neighboring states

vs. Minnesota: Minnesota's top rate is 9.85% - significantly higher

vs. South Dakota: South Dakota has no state income tax, but North Dakota's rates are still very competitive

vs. Montana: Montana's top rate is 6.9% - more than double North Dakota's highest rate

Key factors affecting your North Dakota tax

Large standard deduction: At $13,850 for singles, many lower-income residents owe no state tax

No local income taxes: Unlike some states, North Dakota cities and counties cannot impose additional income taxes

Oil industry impact: The state's energy sector helps keep rates low for everyone

Resident vs. non-resident: Non-residents pay the same rates but only on North Dakota-source income

What you should do

North Dakota's low rates mean most employees don't need to worry about significant state tax withholding issues. However, check that your employer is withholding the correct amount, especially if you have other income sources. The state withholding might seem small compared to federal taxes, but accuracy still matters for avoiding surprises at filing time.

Key takeaway: North Dakota has one of the lowest state income tax burdens in the US, with most residents paying an effective rate under 2% thanks to low rates and a generous standard deduction.

Key Takeaway: North Dakota has one of the lowest state income tax burdens in the US, with most residents paying an effective rate under 2% thanks to low rates and a generous standard deduction.

Calculate your North Dakota take-home pay →

Income Range	Tax Rate	Annual Tax on $60K	Monthly Impact
$0 - $41,775	1.1%	$459.53	$38.29
$41,776 - $101,050	2.04%	$371.79	$31.00
$101,051 - $206,200	2.27%	N/A	N/A
$206,201 - $445,850	2.64%	N/A	N/A
Over $445,850	2.9%	N/A	N/A

Income Range

Tax Rate

Annual Tax on $60K

Monthly Impact

$0 - $41,775

1.1%

$459.53

$38.29

$41,776 - $101,050

2.04%

$371.79

$31.00

$101,051 - $206,200

2.27%

N/A

$206,201 - $445,850

2.64%

N/A

Over $445,850

2.9%

N/A

More Perspectives

Sarah Chen, Payroll Tax Analyst

New North Dakota residents or people considering a move to North Dakota

Moving to North Dakota: Major tax savings opportunity

If you're considering a move to North Dakota, the state income tax savings could be substantial depending on your current state. North Dakota's maximum rate of 2.9% is among the lowest in the nation.

Coming from high-tax states: The savings are dramatic. If you're moving from California (13.3% top rate), New York (8.82%), or Illinois (4.95%), you could save thousands annually. A $100,000 earner moving from California could save $8,000+ per year in state taxes alone.

Coming from no-tax states: While states like Texas, Florida, and Wyoming have no income tax, North Dakota's rates are so low that the impact is minimal - often under $1,000 annually for middle-income earners.

Part-year resident considerations

If you moved to North Dakota during 2026, you'll file Form ND-1 as a part-year resident:

Only income earned as a North Dakota resident is subject to the state's tax

You may still owe taxes to your previous state for income earned there

Keep detailed records of your move date and income sources

Why people are moving to North Dakota

Beyond low taxes, North Dakota offers:

Strong job market, especially in energy and agriculture

Low unemployment rates

Reasonable cost of living in most areas

No state sales tax on most services

Moving away from North Dakota: If you're leaving the state, you'll owe North Dakota tax only on income earned while you were a resident. Given the low rates, this typically isn't a significant concern.

Key takeaway: Moving to North Dakota can result in significant state tax savings compared to most other states, with typical residents paying under 2% of their income in state taxes.

Key Takeaway: Moving to North Dakota can result in significant state tax savings compared to most other states, with typical residents paying under 2% of their income in state taxes.

How much is North Dakota state income tax?