Clear Money Guide
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A quick view of the questions, practical details and source notes below.
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2026 edition · statute-cited · part of Clear Money Guide’s 51-state retirement tax series. This guide covers state taxes on retirement income and estate transfers; property and sales taxes vary by county and are outside its scope.
Updated July 24, 2026. Quick answer: North Dakota technically taxes retirement withdrawals — and for most retirees the bill rounds to almost nothing. The state’s three-bracket structure (HB 1158, 2023) starts at 0%, then 1.95%, topping out at just 2.5% — the lowest top rate of any state with a broad income tax. Social Security has been fully exempt at all incomes since TY2021 (N.D.C.C. §57-38-30.3), and military retirement is fully deductible. Many retirees’ taxable income lands entirely in the 0% bracket. No estate or inheritance tax.
Federal civil service pensions in North Dakota: does North Dakota tax federal pensions.
More state retirement-income schedules, line by line: North Dakota ND-1 retirement lines.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: North Dakota tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does North Dakota tax 403(b) and 457(b) withdrawals.
Before the tax question, the teachers’ fund (TFFR), with its options and refund rules from its own handbook: North Dakota TFFR retirement decisions.
Married, or planning for a spouse’s death? Whether the state is a community property state, from its own statutes: Is North Dakota a community property state?.
Selling your home? How the state taxes the profit, from its own tax documents: Does North Dakota tax the profit from selling your home?.
The state’s income tax schedule: the North Dakota tax brackets for 2026.
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: North Dakota tax withholding on IRA and 401(k) withdrawals.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does North Dakota have an inheritance tax?.
For trust income specifically: does North Dakota tax trust income.
For dividends and interest specifically: does North Dakota tax dividends and interest.
For annuity payments specifically: does North Dakota tax annuity income.
Making a gift or planning an estate? The state’s gift tax answer, from its own tax documents: Does North Dakota have a gift tax?.
Planning for what you leave behind? The state’s estate tax answer, from its own tax documents: Does North Dakota have an estate tax?.
For military retired pay: does North Dakota tax military retirement.
Saving for a child’s college? The state’s 529 break has its own page: North Dakota 529 plan tax deduction.
For the sale of stocks, funds or real estate: does North Dakota tax capital gains.
For 401(k) and IRA withdrawals specifically: does North Dakota tax 401(k) and IRA withdrawals.
Before the tax question, the NDPERS payment options, refund and service purchase rules: NDPERS retirement decisions.
The 0% bracket does the work
There is no general exclusion for pensions, 401(k)s or IRAs (the deductions for retirement benefits received cover retired military pay and retired peace officers who served at least twenty years or retired for a medical disability), and mostly no need: with Social Security fully subtracted and the 0% bracket covering taxable income up to $49,575 single / $82,800 joint (TY2026 figures, indexed; 1.95% then applies up to $250,400/$304,850, and 2.5% only above that), a typical retiree couple’s withdrawals face either nothing or 1.95% on a slice. Flat-tax proposals in the 2025 session did not change the current rates — the 0% / 1.95% / 2.5% structure stands for 2026. The practical read: North Dakota functions as a near-no-tax state for ordinary retirement incomes without appearing on any “no income tax” list.
How North Dakota taxes retirement income (statute-cited)
| Income tax | Three brackets: 0% / 1.95% / 2.5% (HB 1158, 2023; unchanged for 2026) |
| Social Security | Not taxed — full subtraction at all incomes since TY2021 (N.D.C.C. §57-38-30.3) |
| Pension / 401(k) / IRA | Taxable — but many retirees fall wholly in the 0% bracket; no general exclusion |
| Military retirement | Fully deductible (TY2019+) |
| Estate / inheritance tax | None |
Probate: reasonable fees and a $100,000 affidavit
North Dakota is a UPC state — reasonable compensation (N.D.C.C. §30.1-18-19), no percentage schedule. Small estates: up to $100,000 of personal property passes by collection affidavit (N.D.C.C. §30.1-23-01). Context: probate cost by state · small-estate limits by state.
Is North Dakota a good state to retire in for taxes?
On the numbers, yes — and almost nobody says so: exempt Social Security, a 2.5% ceiling, a 0% bracket that swallows modest withdrawals, no death taxes, cheap UPC probate. A retiree comparing North Dakota to South Dakota’s true zero will find the practical difference is often under a few hundred dollars a year. The real decision factors are climate and community, not the tax code — which is precisely what makes the state’s absence from national “best tax states for retirees” lists a blind spot.
North Dakota vs. common alternatives
| State | Social Security | Pension / 401(k) / IRA | Estate tax | Inheritance tax |
|---|---|---|---|---|
| North Dakota | Not taxed | Taxable — but top rate is just 2.5% (0% first bracket) | None | None |
| South Dakota | Not taxed | Not taxed (no income tax) | None | None |
| Montana | Taxed to the federally taxable extent | Fully taxable; $5,500 subtraction at 65+ | None | None |
| Minnesota | Partially taxed (income-tested subtraction) | Fully taxable; public-pension subtraction only | Yes — $3M exclusion, frozen | None |
Comparison rows summarize general rules; see our 51-state retirement tax table for statute-cited detail.
Considering a Roth conversion? The converted amount is taxed as ordinary income in the year you convert, and North Dakota may treat it differently from the retirement income above — see how all 51 jurisdictions tax Roth conversions.
Finding a financial advisor in North Dakota
Per the SEC’s July 2026 Investment Adviser roster, North Dakota has 9 SEC-registered advisory firms (#52 nationally) managing $3.5 billion (#53 by AUM). Full breakdown: North Dakota advisor statistics. Reviewing fee structures: fee-drag calculator.
What probate costs in North Dakota
North Dakota sets probate compensation by a “reasonable fee” standard with no percentage schedule, so anyone quoting a firm figure is estimating. And the small-estate shortcut of $100,000 does not clear a solely owned house on its own, which is the detail most guidance omits. Full detail with the governing statute, the court filing fee and the threshold: North Dakota probate cost. To price a specific estate, use the probate cost calculator.
Cite or share this guide
Suggested citation: Clear Money Guide, “North Dakota Retirement Taxes (2026 edition),” statute-cited; clearmoneyguide.com/north-dakota-retirement-taxes/. Free to cite with attribution and a link. Data verified July 23–24, 2026 against state statutes, session laws, and revenue-department guidance.
Figures verified against N.D.C.C. chapters 57-38, 30.1-18 and 30.1-23 (ndlegis.gov), the ND Tax Commissioner 2025 individual income tax booklet, 2026 withholding booklet and income tax history page on September 30, 2026; the TY2026 thresholds come from the 2026 Form ND-1ES; the comparison-state rows, the SEC advisory-firm statistics and the no-estate-tax and lowest-top-rate claims were not re-checked.