Clear Money Guide
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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.
The 0% bracket does the work
There is no retirement-specific exclusion for pensions, 401(k)s or IRAs — and mostly no need: with Social Security fully subtracted and the 0% bracket covering taxable income up to $48,475 single / $80,975 joint (TY2025 figures, indexed; 1.95% then applies up to $244,825/$298,075, 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.