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Tool | October 2015

State-by-State Guide to Taxes on Retirees

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North Dakota

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The Bottom Line
Map of North Dakota

Not Tax-Friendly

The Peace Garden State is in the minority of states that tax at least some portion of Social Security benefits, and it offers no tax breaks for retirement income. State income tax rates range from a low of 1.1% to a high of 2.9%. Seniors may qualify for a homestead tax credit on property taxes.

State Sales Tax

5% (food, heating fuel, water, electricity and prescription drugs are exempt). Alcoholic beverages are taxed at 7%. New farm machinery, new irrigation equipment for agricultural use, and new mobile homes are taxed at 3%. Cities and counties that have adopted home-rule charters may levy additional sales and use taxes. The highest combined city and county local tax is 3%.

Income Tax Range

Low: 1.10% (on up to $37,450 of taxable income for singles and up to $62,600 for married couples filing jointly)

High: 2.90% (on taxable income over $411,5000)

Social Security

Benefits are taxed to the same extent as on the federal tax return.

Exemptions for Other Retirement Income

North Dakota does not offer any retirement income tax breaks for seniors. Even out-of-state government pensions are fully taxed. Railroad Retirement income is exempt.


Taxable at ordinary income tax rates.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Taxable at ordinary income tax rates.

Private Pensions

Taxable at ordinary income tax rates.

Public Pensions

Taxable at ordinary income tax rates.

Property Taxes

Median property tax on North Dakota's median home value of $155,400 is $1,719, according to the Tax Foundation.

Tax breaks for seniors: A Homestead Tax Credit is available to senior citizens (age 65 and older) who own or rent their home. For married couples, only one spouse may apply for the credit. Your income, plus the income of your spouse and any dependents, may not exceed $42,000 for the calendar year preceding the assessment date. Your assets cannot exceed $500,000, including your home's market value and any assets gifted or divested within three years. The size of the credit depends on your income; the maximum homestead credit is $4,500 of taxable value for those with income of $22,000 or less. For renters, the refund cannot exceed $400. You can receive the refund if 20% of your annual rent exceeds 4% of your income.

Inheritance and
Estate Taxes

There is no inheritance tax and no estate tax.


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