North Dakota State Tax Rate (2026 & 2027 Guide)

North Dakota uses a graduated state income tax system with very low rates compared to most states.

For the 2026 & 2027 tax years, rates range from 0% to 2.5%.

The key thing to understand is that only the income within each bracket is taxed at that rate, not your entire income.

North Dakota State Income Tax Brackets

Single Filers and Married Filing Separately

• $0 to $48,475 → 0%
• $48,475 to $244,825 → 1.95%
• $244,825+ → 2.5%

Married Filing Jointly

• $0 to $80,975 → 0%
• $80,975 to $298,075 → 1.95%
• $298,075+ → 2.5%

Head of Household

• $0 to $64,950 → 0%
• $64,950 to $271,450 → 1.95%
• $271,450+ → 2.5%

How North Dakota’s Tax System Works

North Dakota’s system is progressive, but very tax-friendly with a 0% bracket for lower incomes and a low top rate.

Example: If you earn $100,000 as a single filer, the first $48,475 is taxed at 0%, and only the remaining portion is taxed at 1.95%, which keeps your overall tax rate very low.

Marginal vs Effective Tax Rate

Understanding this difference is important for tax planning.

• Marginal rate = the highest tax bracket your income reaches
• Effective rate = the average rate you actually pay

Example: Even if part of your income reaches the 2.5% bracket, your effective rate will usually be closer to 1%–2% because a large portion may be taxed at 0% or 1.95%.

What Income Is Taxed in North Dakota

North Dakota taxes most types of income, including:

• Wages and salaries
• Self-employment income
• Investment income
• Retirement income (with some exclusions)

There are also some key benefits:

• Social Security income is not taxed
• Military and certain retirement income may be exempt

These help reduce the overall tax burden, especially for retirees.

Are North Dakota Taxes High?

Compared to other states:

• The top rate of 2.5% is one of the lowest in the U.S.
• A 0% starting bracket benefits lower-income taxpayers
• The overall tax burden is considered low

For many residents, North Dakota is one of the most tax-friendly states.

Electronic Filing Recommendation 💻

• File electronically to reduce errors and processing delays
• Tax software automatically applies North Dakota’s low-rate brackets
• Double-check income thresholds to avoid overpaying
• E-filing helps you receive refunds faster and ensures accuracy

Summary

North Dakota’s state income tax system includes three brackets ranging from 0% to 2.5%, making it one of the lowest-tax states in the country.

Because of the 0% bracket and low rates, most taxpayers pay a very low effective tax rate, especially when deductions and exemptions are applied.