What is the North Dakota state income tax rate in 2026?
North Dakota taxes income in 3 brackets from 0.00% to 2.50% in 2026; the top rate starts at $250,400 of taxable income for a single filer and $304,850 for a married couple filing jointly. Example: a married couple, both 70, with $40,000 of Social Security, a $30,000 private pension and $30,000 of IRA withdrawals ($100,000 in all; the pension and IRA money split evenly between them) owes $0 of North Dakota income tax (0.0% of their income) and $5,087 of federal tax; a single 62-year-old with $24,000 of Social Security, an $18,000 pension and $18,000 of IRA withdrawals ($60,000 in all) owes $0 to North Dakota and $4,111 federal. The schedule, how North Dakota treats each kind of retirement income, and its local taxes follow.
| Rate | Single | Married filing jointly |
|---|---|---|
| 0.00% | $0 to $49,575 | $0 to $82,800 |
| 1.95% | $49,575 to $250,400 | $82,800 to $304,850 |
| 2.50% | over $250,400 | over $304,850 |
How North Dakota taxes retirement income in 2026
| Standard deduction or personal exemption | $16,100 single, $32,200 married filing jointly, $24,150 head of household. The standard deduction includes $2,050 more for a single or head-of-household filer 65 or older, and $1,650 more for each spouse 65 or older on a married return. (North Dakota Office of State Tax Commissioner; rules) |
|---|---|
| Social Security | Social Security benefits are fully exempt: none of the federally taxable amount enters the state base. (North Dakota Office of State Tax Commissioner; rules) |
| Pensions, annuities and IRA/401(k) withdrawals | No exclusion: pension, annuity and IRA/401(k) distributions are taxed as ordinary income. (North Dakota Office of State Tax Commissioner; rules) |
| Age 65 and older | The federal senior deduction is also taken against the state base: $6,000 for each taxpayer 65 or older, each reduced by 6% of income above $75,000 (single and head of household) or $150,000 (MFJ). (Internal Revenue Service; rules) |
| Capital gains | 60% of net long-term gain enters the base (40% is excluded) and is taxed at ordinary rates. Short-term gains are ordinary income. (North Dakota Office of State Tax Commissioner; rules) |
Local income taxes: none in North Dakota. The local income taxes the tax engine computes for 2026 are in Delaware, Indiana, Iowa, Kentucky, Maryland, Michigan, Missouri, New York, Ohio, Oregon and Pennsylvania.
Your whole 2026 return in North Dakota, federal and state together, ends in a refund or an amount owed: 2026 tax return calculator (free) → What five typical retiree households owe or get back in North Dakota and every other state: the 2026 tax return study.
Figures for 2026 from QuantCalc’s open tax engine (federal 2.3.2, state 1.14.2), for a full-year resident. An estimate, not tax advice: credits, itemized deductions and rules this page does not ask about change a real return. Every North Dakota rule with its official sources: North Dakota rules and sources.
In our 510,000-path Monte Carlo study of 30-year retirement outcomes, North Dakota retirees finished at 74.64% success rate (ranked #17 of 51 by success rate, #15 of 51 by lowest median lifetime state tax). Median 30-year state-tax cost: $31,500 — that is $31,500 more than a Wyoming retiree pays. Median terminal balance after 30 years: $942,362. State tax is part of the optimization here — the playbook below shows the federal-state-ACA stack.
The ND verdict
For a retiree planning withdrawals in 2026, North Dakota is broadly retirement-tax-friendly, with most distributions sheltered. A low top rate and social security fully exempt.
North Dakota has no dollar-capped retirement-income exclusion, so every converted dollar enters the state tax base. The marginal cost of a conversion here is the federal bracket plus the state rate plus, below 65, whatever premium tax credit crossing the 400% FPL cliff would cost you.
Worked example: $30k Roth conversion in North Dakota
Consider a married couple age 58 in North Dakota with $75,000 of ordinary income (their MAGI), both on ACA Marketplace coverage. They want to convert $30,000 from a traditional IRA to a Roth. The North Dakota state tax on that conversion is approximately $750 — the full amount is taxed at 2.50%. Federal income tax adds another $3,600 — the whole conversion is taxed in the federal 12% bracket. And because the conversion pushes their MAGI to $105,000 — over the 400% FPL cliff of $84,600 — they lose their full ACA premium tax credit, $19,804 a year at North Dakota's average benchmark Silver premium. Total cost of the $30,000 conversion: about $24,154, or an effective 80.5% marginal rate. That state figure uses North Dakota's top bracket rate, so read it as a ceiling: a household whose income lands in a lower bracket pays less, and North Dakota's own deductions reduce it further. The federal-state-ACA stack matters in North Dakota.
Cost breakdown
| Component | Amount |
|---|---|
| Federal income tax (12% bracket) | $3,600 |
| North Dakota state income tax | $750 |
| ACA premium tax credit clawback | $19,804 |
| Total cost on $30,000 conversion | $24,154 (80.5% effective) |
Scenario B (friendly): $50k post-65 conversion in North Dakota
A married North Dakota couple age 67, both on Medicare, with $40K pension income converts $50,000 in a single year. State tax owed: $1,250 — the full amount is taxed at 2.50%. Federal income tax added: $4,607 ($7,500 of the added income fills deductions their pension left unused and the rest is taxed in the federal 10%–12% brackets). No ACA clawback (on Medicare). Total: $5,857, or 11.7% effective. The post-65 conversion window is where a North Dakota ladder is cheapest.
What the Monte Carlo data says about North Dakota
QuantCalc Research ran a 30-year, 10,000-path Monte Carlo simulation for an identical representative retiree (age 60, $2M starting balance, 60/40 portfolio, $80K real annual spend) in each of the 51 U.S. jurisdictions. Here's how North Dakota compared to the best- and worst-case states:
| Metric | North Dakota | Wyoming (best) | California (worst) |
|---|---|---|---|
| 30-year success rate | 74.64% | 77.11% | 69.03% |
| Rank (of 51) | #17 | #1 | #51 |
| Median lifetime state tax (30y) | $31,500 | $0 | $154,980 |
| Median total tax (30y) | $249,900 | $218,400 | $373,380 |
| Median terminal balance | $942,362 | $999,751 | $695,612 |
| Δ success vs Wyoming | -2.47 pp | — | −8.08 pp |
Sources: QuantCalc 51-State Monte Carlo Study (2026-05-12) — 510,000 total paths, methodology fully documented and dataset released CC-BY-4.0. North Dakota's row in the dataset uses the same portfolio + spend + retirement age as every other state — the only variable is state tax treatment.
How North Dakota treats capital gains in retirement
North Dakota taxes long-term capital gains as ordinary income at the same top bracket rate (2.50%). That stacks on top of federal LTCG (0%/15%/20%) and the 3.8% NIIT for high earners. A 'free' federal 0% LTCG harvest still costs you up to 2.50% at the state level — meaningful in this jurisdiction, particularly during Roth-conversion years when your MAGI is already elevated.
Why the ACA cliff hits hard in North Dakota
The 400% federal-poverty-level cliff is federal, not state-specific — but its dollar impact depends on the benchmark Silver-plan premium in your county. North Dakota's Marketplace pricing and your household composition determine the size of the subsidy at risk. A couple aged 58 with MAGI of exactly $84,600 still has $18,848 a year of premium tax credit at North Dakota's average benchmark Silver premium, and all of it is on the line. With the 2021–2025 enhanced credit expired, $1 of additional MAGI above 400% FPL eliminates the entire credit.
For 2026 the 400% FPL threshold is:
- Household of 1: $62,600
- Household of 2: $84,600
- Household of 3: $106,600
- Household of 4: $128,600
Roth conversion strategy for North Dakota
The ND-specific playbook depends on tier:
- Identify your cliff distance. Compute MAGI from all income sources (wages, capital gains, interest, dividends, traditional withdrawals). Find your headroom under 400% FPL. Use the live cliff widget above for a quick check.
- Stay under the cliff if you can. In North Dakota at 2.50%, the marginal cost of going over the cliff is federal tax + state tax + full PTC clawback. The break-even conversion size is smaller than in tax-free states.
- If you must go over, convert big. Once you've crossed the cliff, additional conversion dollars only cost federal + state tax (no incremental PTC loss). A "rip the bandage" conversion year can be efficient if you have many traditional dollars to move.
- Coordinate with capital gains and the 0% LTCG bracket. North Dakota taxes long-term capital gains as ordinary income at the same top bracket rate (2.50%). That stacks on top of federal LTCG (0%/15%/20%) and the 3.8% NIIT for high earners. A 'free' federal 0% LTCG harvest still costs you up to 2.50% at the state level — meaningful in this jurisdiction, particularly during Roth-conversion years when your MAGI is already elevated.
- Plan ahead for IRMAA. The IRMAA Medicare premium surcharge has a 2-year lookback. A North Dakota resident in their early 60s converting today will see IRMAA implications at 65. See RMD + IRMAA calculator for the lookback math.
State tax basics for North Dakota retirees
| Question | North Dakota |
|---|---|
| State income tax | 2.50% top marginal |
| Number of brackets | 3 |
| Social Security taxed | No |
| 401(k) / Traditional IRA taxed | Yes |
| Retirement-income exclusion (couple) | None |
| Roth conversion draws that exclusion | Not applicable |
| State estate / inheritance tax | No |
| Retirement-friendliness tier | friendly |
| Notable feature | a low top rate and Social Security fully exempt |
| 30-yr MC success rate (rank) | 74.64% (#17/51) |
| Median 30-yr state tax | $31,500 |
Model your full North Dakota retirement scenario
Free Monte Carlo (100 paths per run; 10,000 with PRO) with state-specific tax engine, ACA cliff, Roth conversion optimizer, IRMAA lookback — free, no signup.
Run a free simulation →What a year-end move does to your North Dakota and federal tax in 2026
Each move changes three bills at once: the federal return, the North Dakota return and, for anyone on Medicare, the IRMAA surcharge the 2026 income sets for 2028. Example: a married couple, both 72, with a $40,000 pension, $50,000 of Social Security, a $30,000 IRA withdrawal and $10,000 of long-term gains already realized in 2026, the pension, the IRA money and the conversion split evenly between them on the state return. Each row is that year with one move made, against the same year without it (negative = less tax).
| Move (by December 31, 2026) | Federal tax | North Dakota tax | IRMAA in 2028 |
|---|---|---|---|
| Convert $25,000 to a Roth IRA | $3,165 | $0 | $0 |
| Send $10,000 of the IRA withdrawal to charity as a QCD | −$1,200 | $0 | $0 |
| Harvest a $5,000 loss against the year's gains | $0 | $0 | $0 |
An estimate from QuantCalc’s open tax engine (federal 2.3.2, state 1.14.2) for the 2026 tax year. Not tax advice: your return depends on facts this page does not ask about, so check a move with your tax preparer or custodian before acting. IRMAA uses the 2026 tiers for two people on Medicare; the 2028 tiers are not published yet. How the engine computes each line, with its official source: federal, North Dakota.
Related calculators and reading
- All-states retirement tax comparison — see North Dakota alongside the other 50 jurisdictions.
- State Retirement Tax Data 2026 — the per-jurisdiction rate, exclusion and Social Security figures behind this page, as CSV and JSON.
- ACA Subsidy Cliff Optimizer — find the largest Roth conversion that keeps you under 400% FPL.
- Roth Conversion Optimizer — bracket-fill vs. fixed-amount strategy comparison.
- RMD + IRMAA Calculator — Medicare premium surcharge based on 2-year-old MAGI.
- Safe Withdrawal Rate Calculator — sequence-of-returns-aware withdrawal planning.
- Research: 51-State 30-year Monte Carlo (2026) — full ranking and dataset.
- Research: Monte Carlo ACA Cliff 2026 — 80,000-path study of the cliff cost.
FAQ
What is the North Dakota state income tax rate in 2026?
North Dakota taxes income in 3 brackets from 0.00% to 2.50% in 2026; the top rate starts at $250,400 of taxable income for a single filer and $304,850 for a married couple filing jointly. The full schedule and North Dakota's deductions are on this page (North Dakota Office of State Tax Commissioner; rules).
How much state income tax does a retiree pay in North Dakota?
It depends on the kind of income. In 2026, a married couple, both 70, with $40,000 of Social Security, a $30,000 private pension and $30,000 of IRA withdrawals ($100,000 in all; the pension and IRA money split evenly between them) owes $0 of North Dakota tax, and a single 62-year-old with $24,000 of Social Security, an $18,000 pension and $18,000 of IRA withdrawals ($60,000 in all) owes $0. Federal tax comes on top: $5,087 and $4,111.
Does North Dakota tax Social Security benefits?
No. Social Security benefits are fully exempt: none of the federally taxable amount enters the state base. (North Dakota Office of State Tax Commissioner; rules)
Does North Dakota tax pensions, 401(k) and IRA withdrawals?
No exclusion: pension, annuity and IRA/401(k) distributions are taxed as ordinary income. (North Dakota Office of State Tax Commissioner; rules)
Does North Dakota have local income taxes?
No. No county, city or school district in North Dakota levies an income tax that the tax engine computes for 2026.
Does North Dakota tax Roth conversions?
North Dakota taxes Roth conversions as ordinary income at the state level. A $30,000 conversion by a couple aged 58 costs about $750 in state tax alone — the full amount is taxed at 2.50% — on top of federal tax and any ACA subsidy clawback. That state figure uses North Dakota's top bracket rate, so read it as a ceiling: a household whose income lands in a lower bracket pays less, and North Dakota's own deductions reduce it further.
What is North Dakota's 30-year Monte Carlo retirement success rate?
In QuantCalc's 510,000-path Monte Carlo study, a representative retiree in North Dakota (age 60, $2M balance, 60/40 portfolio, $80K real spend) finished 30 years at 74.64% success rate — ranked #17 of 51 jurisdictions. Median 30-year state tax: $31,500. Median terminal balance: $942,362.
What is the ACA cliff in North Dakota for 2026?
The ACA premium-tax-credit cliff is a federal threshold, not state-specific. For a household of two in 2026, it sits at 400% of the federal poverty level — $84,600. Crossing it by even $1 of MAGI eliminates the full subsidy now that the 2021-2025 enhanced credit has expired.
Is North Dakota a good state to retire for tax purposes?
North Dakota is broadly retirement-tax-friendly, with most distributions sheltered. A low top rate and social security fully exempt. In our Monte Carlo ranking it placed #17 of 51 jurisdictions.
Does North Dakota have a state estate or inheritance tax?
No — North Dakota does not impose a state-level estate or inheritance tax.
How does North Dakota tax capital gains?
North Dakota taxes long-term capital gains as ordinary income at the same top bracket rate (2.50%). That stacks on top of federal LTCG (0%/15%/20%) and the 3.8% NIIT for high earners. A 'free' federal 0% LTCG harvest still costs you up to 2.50% at the state level — meaningful in this jurisdiction, particularly during Roth-conversion years when your MAGI is already elevated.
Last updated 2026-10-02. State income tax figures reflect the 2026 schedule published by North Dakota's tax authority. ACA poverty-level figures: the 2025 HHS poverty guidelines for the 48 contiguous states and DC ($15,650 for one person, plus $5,500 for each additional person; 90 FR 5917), which set 2026 Marketplace coverage. Premium tax credit estimates use North Dakota's average benchmark Silver premium. Monte Carlo numbers from the QuantCalc 51-state research drop (2026-05-12, CC-BY-4.0). This page is educational. Not tax, legal, or financial advice — consult a qualified advisor.