Clear Money Guide
What this state guide covers
A quick view of the questions, practical details and source notes below.
Comparison tables scroll horizontally on smaller screens.
Updated July 28, 2026. Quick answer: Yes. North Dakota taxes IRA and plan distributions in full with no general retirement exclusion, so a Roth conversion is taxed as ordinary income at the state rate on top of your federal bill.
Why a conversion is a different question from a withdrawal
Almost every state summary answers “how does North Dakota tax retirement income?” That is a question about distributions. A Roth conversion is not a distribution in the ordinary sense — it is a voluntary election to recognise income now in exchange for tax-free growth later. Whether a state’s retirement exclusion reaches that election is a separate question, and it is the one that decides your bill.
There is no exclusion to argue about here, which at least makes the maths clean: the converted amount is added to North Dakota taxable income in the conversion year.
Because the state cost is certain, the lever that matters in North Dakota is when and how much — splitting a conversion across tax years, or converting in a year of unusually low income, changes the bill in a way that arguing about the exclusion cannot.
What North Dakota does with the converted amount
State income tax: graduated, three brackets: 0%, 1.95%, 2.5% top rate (HB 1158, 2023)
How North Dakota treats IRA and plan income: Pensions, 401(k) and IRA withdrawals taxable (many retirees fall in the 0% bracket); no general retirement exclusion.
| Conversion | State tax at 1.95% |
|---|---|
| $50,000 | $975 |
| $100,000 | $1,950 |
| $250,000 | $4,875 |
Straight arithmetic at the stated rate. It ignores deductions, credits, and any graduated bracket effects, so treat it as the ceiling rather than a filing figure.
Many North Dakota retirees sit in the zero bracket until a conversion moves them.
The brackets are 0%, 1.95% and 2.5%, and a conversion is ordinary income that can lift you out of the first one. On $100,000 the state cost is $1,950 at the middle rate, which is modest, but the bracket you land in afterwards is the part worth checking carefully.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide is paid when you submit the form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here — you stay on this page.
What happens when you press the button
It asks about nine questions — age, investable assets, location — then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
What to ask a preparer about North Dakota
None on eligibility — it is taxable. Ask instead how splitting the conversion across two tax years changes the bracket outcome.
Converting around a move
Converting in the year you move into North Dakota is the case that catches people. Residency at the moment of conversion is what generally determines which state gets to tax it, so a conversion executed a week before a move and one executed a week after can produce different bills.
Four separate taxes change when you move, not one: income tax on withdrawals, treatment of Social Security, estate tax, and inheritance tax. A state that looks good on conversions can be worse on the other three.
The state bill is the smaller half
Whatever North Dakota does, the conversion is federal ordinary income first. The federal bracket you land in, and whether the conversion pushes you over an IRMAA threshold two years later, will usually move more money than the state line does. The state answer tells you whether to convert here; the federal answer tells you how much to convert at once.
Paying the tax from outside the account matters more than either. Using converted dollars to pay the bill shrinks the balance that was the entire point of converting.
Sources
Authority: N.D.C.C. § 57-38-30.3 (rates, SS and military subtractions); ND Office of State Tax Commissioner individual income tax pages.
Compiled from state statutes, session laws and revenue-department publications and adversarially verified in July 2026. Dataset confidence for North Dakota: high.
This page states what the cited authority says. It is not tax advice, and a conversion large enough to matter is worth putting in front of a preparer who can see your whole return.
Nearby states
A conversion taxed in full at the state level still usually costs more federally than it does locally, and it is worth seeing the two figures together. The Roth conversion state tax calculator puts them side by side, with the share of the total each represents and what reaches the Roth once the tax is paid.