2026 tax year · cross-border wages
Crossing a state line into or out of North Dakota
North Dakota taxes its residents on income earned anywhere, and taxes non-residents on work done inside it. Which return you file depends on which direction you commute.
North Dakota borders 3 states. They fall into 2 different situations, and which one applies decides whether you file one return or two.
Where North Dakota has a reciprocity agreement
North Dakota has wage reciprocity with Minnesota and Montana. Work in one of these and it will not tax your wages at all: you file its exemption certificate with your employer there, which stops its withholding, and report everything to North Dakota. There is no nonresident return.
| Work state | Exemption certificate | Its tax on your wages |
|---|---|---|
| Minnesota | not in the 2026 dataset, ask the state | $0 |
| Montana | not in the 2026 dataset, ask the state | $0 |
Reciprocity covers wages paid by an employer. It does not cover self-employment income, so a 1099 worker in North Dakota generally still sources income to where the work was done.
Where the work state takes nothing
South Dakota levies no personal income tax, so there is no return to file there and no credit to claim. But North Dakota still taxes the wages as a resident. The catch is withholding: an employer in South Dakota has no state income tax to withhold, so nothing is taken out for North Dakota either. The liability is real and nothing is being set aside against it, which usually means North Dakota estimated payments.
What North Dakota itself takes across a salary range
A single filer, taking the standard deduction. This is the figure every arrangement above is measured against, the tax North Dakota charges a resident, whether the work happened inside the state or over a line:
| Wages | North Dakota tax | Effective rate |
|---|---|---|
| $45,000 | $5 | 0.01% |
| $70,000 | $468 | 0.67% |
| $120,000 | $1,393 | 1.16% |
Coming the other way: living in a no-income-tax state, working in North Dakota
South Dakota border North Dakota and levy no personal income tax of their own. A resident of South Dakota who works in North Dakota has the simplest arrangement on this page and the least room to improve it: North Dakota taxes the wages earned inside it, $468 on $70,000, there is no home-state return, and so there is nothing to claim a credit against. Living across a border that charges nothing does not reduce the North Dakota bill by a cent.
Reciprocity cannot help either, even where North Dakota has agreements: reciprocity shifts the income to the home state's return, and a state with no income tax has no return to shift it to.
What North Dakota charges as your home state
North Dakota taxes income on 3 graduated brackets for 2026, from 0% up to 2%. Because wages stacks on top of any other income, a second source can push part of it into the next bracket.
State income tax on wages only, 2026 rates. Not tax advice, what this does and doesn't cover.