Withholding Taxes: North Dakota

Federal law and guidance on this subject should be reviewed together with this section.

Authors: Joel Fremstad and Lynn Block, Fremstad Law

Summary

• In North Dakota, a resident includes an individual who is domiciled in the state, or has a permanent place of abode in the state, and spends more than seven months of the year in the state. Nonresidents are subject to North Dakota income tax withholding for services performed in North Dakota. The pay of qualifying military employees and their spouses are exempt from withholding. North Dakota has reciprocal income tax withholding agreements with Minnesota and Montana. Special income tax withholding exemptions apply to certain employees. See Withholding on Residents, Nonresidents and Expatriates.
• Federal Form W-4 is used to determine employees' North Dakota income tax withholding. See Form W-4.
• Employers must provide federal Form W-2, Wage and Tax Statement, to current and terminated employees by January 31 of each year. See Form W-2 Requirements.
• Withholding on supplemental wage payments, such as bonuses, is calculated differently depending on whether the payments are made at the same time as regular wages or separately. See Supplemental Wage Payments.
• North Dakota employers are required to keep all business and employee records needed to determine the employer's correct tax liability. Records must be available at all times for inspection on request of the tax commissioner. See Recordkeeping Requirements.