North Dakota

ND pickup estate tax phased out for deaths after Dec 31 2004; return requirement eliminated 2017

“the North Dakota estate tax that is based on the state death tax credit allowable on the federal return has been phased out for estates of decedents whose death occurs after December 31, 2004.”

Note: Same page (2017 session): 'Legislation was approved that eliminates the requirement for an estate to file a North Dakota estate tax return unless tax is due with the return.'

North Dakota top income tax rate is 2.5% on federal taxable income above $298,075 (MFJ)

“For taxable years beginning on or after January 1, 2025, a tax is imposed upon the North Dakota taxable income at the rate of 0% on income to $80,975; 1.95% on income exceeding $80,975 but not exceeding $298,075; and 2.5% on income exceeding $298,075, for married individuals filing jointly.”

Note: Base = federal taxable income. Caution: web rate snippets sometimes show the single schedule as MFJ the MFJ thresholds are approximately double the single thresholds. URL resolves to the N.D.C.C. Chapter 57-38 index; §57-38-30.3 is within this chapter.

North Dakota allows a 40% exclusion of net long-term capital gains from taxable income

“An individual may deduct from North Dakota taxable income 40 percent of net long-term capital gain included in federal taxable income for the taxable year.”

Note: The 40% exclusion survived the 2023 overhaul and is confirmed in the 2025 ND-1 instructions (line 6 worksheet). The exclusion equals 40% × min(Schedule D line 15, line 16), so ST losses erode the excluded amount. The harvest rule still ties for an all-LT estimand. Also: 40% qualified-dividend exclusion (line 13). Effective top rate on LT gains ≈ 2.5% × 60% = 1.5% near-zero for high-income ND residents. URL resolves to the N.D.C.C. Chapter 57-38 index; §57-38-30.3 is within this chapter.

North Dakota allows a 40% exclusion of net long-term capital gains from taxable income

“An individual may deduct from North Dakota taxable income 40 percent of net long-term capital gain included in federal taxable income for the taxable year.”

Note: The 40% exclusion survived the 2023 overhaul and is confirmed in the 2025 ND-1 instructions (line 6 worksheet). The exclusion equals 40% × min(Schedule D line 15, line 16), so ST losses erode the excluded amount. The harvest rule still ties for an all-LT estimand. Also: 40% qualified-dividend exclusion (line 13). Effective top rate on LT gains ≈ 2.5% × 60% = 1.5% near-zero for high-income ND residents. URL resolves to the N.D.C.C. Chapter 57-38 index; §57-38-30.3 is within this chapter.

IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback

“In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.”

Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged.

ND exempts both in-state and out-of-state muni interest no add-back provision

“The income tax imposed by this chapter is upon the North Dakota taxable income of every individual. The North Dakota taxable income of an individual is the individual's federal taxable income with the modifications contained in this chapter.”

Note: Federal taxable income already excludes all muni interest (IRC §103). N.D.C.C. Chapter 57-38 contains no provision adding back out-of-state muni interest; ND does not tax out-of-state muni interest income. URL resolves to the N.D.C.C. Chapter 57-38 index; §57-38-30.3 is within this chapter.

ND exempts both in-state and out-of-state muni interest no add-back provision

“The income tax imposed by this chapter is upon the North Dakota taxable income of every individual. The North Dakota taxable income of an individual is the individual's federal taxable income with the modifications contained in this chapter.”

Note: Federal taxable income already excludes all muni interest (IRC §103). N.D.C.C. Chapter 57-38 contains no provision adding back out-of-state muni interest; ND does not tax out-of-state muni interest income. URL resolves to the N.D.C.C. Chapter 57-38 index; §57-38-30.3 is within this chapter.

North Dakota conforms to IRC §1400Z-2 QOZ gain deferral and exclusion

“The terms used in this chapter have the same meaning as in the Internal Revenue Code, as amended. 'Internal Revenue Code' means the Internal Revenue Code of 1986, as amended through the date of any transaction or event to which this chapter applies.”

Note: North Dakota rolling IRC conformity incorporates §1400Z-2 without modification.

North Dakota conforms to IRC §1202 QSBS gain exclusion via rolling IRC conformity

“For purposes of this section, "North Dakota taxable income" means the federal taxable income of an individual, estate, or trust as computed under the Internal Revenue Code of 1986, as amended, adjusted as follows: ... d. Reduced by forty percent of: (1) The excess of the taxpayer's net long-term capital gain for the taxable year over the net short-term capital loss for that year, as computed for purposes of the Internal Revenue Code of 1986, as amended.”

Note: N.D.C.C. §57-38-30.3 starts from federal taxable income under the IRC 'as amended' (rolling) with enumerated adjustments; no §1202 addback appears, so federally excluded QSBS gain never enters the North Dakota base. The quoted 40% reduction is ND's separate LTCG exclusion, which applies to gain that IS in federal taxable income, not to §1202-excluded gain.

North Dakota subtraction for U.S. obligation interest requires exemption from state income taxation under federal law; FNMA and FHLMC have no such federal bondholder exemption

“An individual may deduct from gross income interest and dividends received from obligations of the United States or its possessions, or of any authority, commission, or instrumentality of the United States, to the extent included in gross income for federal income tax purposes if exempt from state income taxes under the laws of the United States.”

Note: N.D.C.C. §57-38-30.2 requires the income be 'exempt from state income taxes under the laws of the United States.' FNMA (12 U.S.C. §§1719(e), 1723a(c)) and FHLMC (12 U.S.C. §1455(a)) have no bondholder exemption statute.

U.S. Treasury interest exempt from North Dakota income tax: 31 U.S.C. §3124(a) prohibits state taxation of U.S. government obligations

“Stocks and obligations of the United States Government are exempt from taxation by a State or political subdivision of a State. The exemption applies to each form of taxation that would require the obligation, the interest on the obligation, or both, to be considered in computing a tax.”

Note: 31 U.S.C. §3124(a) preempts state income taxation of U.S. government obligations. Covers T-bills, T-notes, T-bonds, TIPS, and I-bonds. Most states allow a deduction or subtraction by statute cross-referencing this federal preemption.

FHLB and FFCB bond interest exempt from North Dakota income tax: federal enabling statutes mandate state tax exemption

“Any security issued under this chapter by a Federal home loan bank, including the stock thereof, shall be exempt from taxation, except taxes upon real estate, by any State, county, municipality, or local taxing authority.”

Note: 12 U.S.C. §1433 (FHLB) and 12 U.S.C. §2023 (FFCB/Farm Credit Act) both mandate state tax exemption for securities issued under their chapters. Contrasts with FNMA (12 U.S.C. §§1719(e), 1723a(c)) and FHLMC (12 U.S.C. §1455(a)) which have no bondholder exemption statute and whose interest is taxable by income-tax states.

Farm Credit Act: notes, bonds, debentures, and other obligations of Farm Credit Banks are instrumentalities of the United States exempt from all State, municipal, and local taxation

“The mortgages held by the Farm Credit Banks and the notes, bonds, debentures, and other obligations issued by the banks shall be considered and held to be instrumentalities of the United States and, as such, they and the income therefrom shall be exempt from all Federal, State, municipal, and local taxation, other than Federal income tax liability of the holder thereof under the Public Debt Act of 1941 (31 U.S.C. 3124).”

Note: 12 U.S.C. §2023 explicitly covers 'the income therefrom' (i.e., interest payments to bondholders), exempting it from all State and local taxation. The only carve-out is federal income tax on the holder. Parallel to 12 U.S.C. §1433 (FHLB Act), which exempts FHLB securities from state taxation. Together §1433 and §2023 mandate state and local tax exemption for both FHLB and FFCB bond interest. Shared across all jurisdictions: a single object reference satisfies buildCitationIndex() identity check.

IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback

“In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.”

Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged.

North Dakota top income tax rate is 2.5% on federal taxable income above $298,075 (MFJ)

“For taxable years beginning on or after January 1, 2025, a tax is imposed upon the North Dakota taxable income at the rate of 0% on income to $80,975; 1.95% on income exceeding $80,975 but not exceeding $298,075; and 2.5% on income exceeding $298,075, for married individuals filing jointly.”

Note: Base = federal taxable income. Caution: web rate snippets sometimes show the single schedule as MFJ the MFJ thresholds are approximately double the single thresholds. URL resolves to the N.D.C.C. Chapter 57-38 index; §57-38-30.3 is within this chapter.

North Dakota conforms to the federal capital-loss base; treatment of an imported pre-residency section 1212 carryforward is a structural inference

“"Taxable income" in the case of individuals, estates, trusts, and corporations means the taxable income as computed for an individual, estate, trust, or corporation for federal income tax purposes under the United States Internal Revenue Code of 1954, as amended, plus or minus the adjustments as may be provided by this chapter or other provisions of law.”

Note: N.D.C.C. §57-38-01 defines taxable income as federal taxable income under the Internal Revenue Code plus or minus chapter adjustments, so the federal section 1212 capital-loss base carries through. No published guidance addresses the imported pre-residency carryforward; that piece stays a structural inference.