State-by-State Guide to Taxes on Retirees - North_Dakota
Tool | November 2019

State-by-State Guide to Taxes on Retirees

North Dakota

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The Bottom Line
Flag of North Dakota

Tax-Friendly

The Peace Garden State doesn’t do much on behalf of retirees. While some property-tax breaks are available to those over 65, North Dakota 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. And yet, income taxes are so low that North Dakota ends up being quite tax-friendly for retirees.

State Sales Tax

5% state levy. Localities can add as much as 3.5%, and the average combined rate is 6.85%, according to the Tax Foundation. “New farm machinery, new farm machinery attachments or new irrigation equipment [used] exclusively for agricultural purposes” is taxed by the state at 3%. Local taxes may still apply.

Income Tax Range

Low: 1.10% (on up to $38,700 of taxable income for singles and up to $64,650 for married couples filing jointly)

High: 2.90% (on taxable income over $424,950)

Effective tax rate: 1.1% for single filers, 1.58% for joint filers.

Social Security

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

Exemptions for Other Retirement Income

Starting in 2019, income from a military retirement plan is exempt.

Railroad Retirement benefits are also exempt.

Property Taxes

In North Dakota, residents pay an average of $1,056 in taxes per $100,000 of assessed home value.

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.

Vehicle Taxes

5% excise tax due on purchases.

Inheritance and Estate Taxes

None.

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