North Dakota retirement taxes at a glance (2026)
| State income tax | Graduated, top rate 2.5%North Dakota has three brackets: 0%, 1.95%, and 2.5%. For 2025, a single filer paid 0% on the first $48,475 and a joint filer on the first $80,975. |
|---|---|
| Social Security | Not taxedNorth Dakota does not tax Social Security benefits. |
| Pensions | TaxedThe state lists no pension exclusion, so pensions included in federal taxable income are taxed at 0% to 2.5%. The large 0% bracket shields much retirement income. |
| 401(k) and IRA withdrawals | TaxedIRA and 401(k) withdrawals are taxed at regular rates; the 0% bracket covers the first $48,475 (single) of taxable income for 2025. |
| Government pensions | — |
| Military retirement pay | Not taxedMilitary retirees can deduct 100% of their military retirement pay. |
| Estate tax | No |
| Inheritance tax | No |
| Property tax help for seniors | The Homestead Credit reduces taxable value by up to $9,000 for people 65+ with income under $40,000. Renters 65+ with income under $70,000 can get up to $600, and all homeowners get a primary residence credit of up to $1,600. |
| Sales tax | State sales tax is 5%; the combined average is about 7.09%. Most groceries and prescription drugs are exempt. |
Recent changes and good to know
- Treatment of public pensions was not verified in a primary source, so that field is null.
- Pension taxation is inferred from the absence of a pension exclusion on the ND Tax Commissioner's exemptions page and federal-taxable-income conformity.
- 2026 bracket thresholds were not published on the pages checked; 2025 thresholds are shown.
How to lower your retirement taxes in North Dakota
- Mix your income sources. Roth IRA withdrawals are tax-free at the federal level and generally in North Dakota too, so a Roth conversion before retirement can cut state tax later. Try the Roth conversion calculator.
- Watch federal Medicare costs. Large IRA withdrawals can raise your Medicare premiums. Check the 2026 IRMAA brackets.
- Think about your heirs. See what your IRA will really cost your family with the Family Tax Rate calculator.
- Comparing states? These have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
Frequently asked questions
Does North Dakota tax retirement income?
Partly. North Dakota does not tax Social Security or military retirement, and taxes other retirement income at low rates (0% to 2.5%).
Does North Dakota tax Social Security?
North Dakota does not tax Social Security benefits.
Does North Dakota tax pensions?
The state lists no pension exclusion, so pensions included in federal taxable income are taxed at 0% to 2.5%. The large 0% bracket shields much retirement income.
Does North Dakota tax 401(k) and IRA withdrawals?
IRA and 401(k) withdrawals are taxed at regular rates; the 0% bracket covers the first $48,475 (single) of taxable income for 2025.
Does North Dakota tax military retirement pay?
Military retirees can deduct 100% of their military retirement pay.
Sources (last verified 2026)
- Individual Income Tax — North Dakota Office of State Tax Commissioner (2026-09-24)
- Income Tax Exemptions and Credits — North Dakota Office of State Tax Commissioner (2026-09-24)
- North Dakota Tax Facts for 2026 — AARP (2026-05-21)
- State Individual Income Tax Rates and Brackets, 2026 — Tax Foundation (2026-02-17)
Educational content only, not tax, legal or investment advice. Plans and tax laws change; confirm details with your employer's plan documents or your state revenue department. Smart Financial Lifestyle is not affiliated with any employer named on this site.