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State retirement tax · North Dakota

Retirement tax rules for North Dakota residents (2026 guide)

North Dakota's effective income-tax rate at retirement-bracket income is approximately 1.80%. Here's what it taxes, what it exempts, and how the worked numbers shake out.

Last reviewed May 3, 2026

Editorial review pending — see editorial process

Effective rate

1.80%

Taxes Social Security?

No

Approx. tax on $90k income

$1,080

Pension carve-outs

Yes

North Dakota taxes income at an approximate effective rate of 1.80% for retirement-income brackets — low enough that most retirees treat it as a near-rounding-error after Social Security carve-outs. SS benefits are fully exempt at the state level, which removes one of the more error-prone parts of state retirement-tax planning.

What North Dakota taxes (and what it doesn’t)

North Dakota taxes retirement income (401(k) withdrawals, IRA withdrawals, pension payments) at the state's standard income-tax rate. Social Security benefits are FULLY EXEMPT from state tax — this matters because it can change your effective state-tax burden by 2-4 percentage points compared to a state that taxes SS.

State-specific note

Three-bracket; ~1.5% effective at $75k-$150k. SS fully exempt as of 2021.

A worked example

Worked example. A North Dakota retiree with $60,000 of pension and IRA withdrawals plus $30,000 of annual Social Security is taxed on the $60,000 of non-SS income only (SS is exempt). At the approximate 1.80% effective rate, that's about $1,080/year — roughly $90/month — owed to the state.

Should you relocate?

North Dakota's low effective rate puts it in the second tier of retirement-friendly states — not as appealing as the no-tax states for headline savings, but typically with stronger public services and lower property/sales tax burdens that can equalise the picture.

See how North Dakota state tax shapes your retirement plan

The calculator’s Taxes tab uses the 1.80% effective rate above and the SS-exemption flag automatically. Run your specific numbers and see the year-by-year tax forecast.

Run my numbers

Frequently asked

  • Does North Dakota tax my Social Security?

    No. North Dakota fully exempts Social Security benefits from state income tax. You'll only owe state tax on non-SS retirement income (401(k), IRA withdrawals, pensions, brokerage gains).

  • What's the effective state tax rate on my retirement income?

    North Dakota's approximate effective rate for retirement-bracket income is 1.80%. For a $90k retirement income with $30k of Social Security, you'd owe roughly $1,080/year in state tax. Real liability varies with bracket structure, age-based exclusions, and pension carve-outs.

  • Should I relocate to North Dakota for retirement?

    It depends on the size of your retirement income, the destination state's effective rate, and your moving costs. The state-tax differential alone is rarely the decisive factor for normal-income retirees. For households with $1M+ retirement income, multi-year tax-arbitrage savings can exceed $20k/year — enough to drive the decision.

  • Are pension benefits taxed differently in North Dakota?

    Many states have specific carve-outs for pension income — particularly for public-sector pensions (teachers, firefighters, police, military). Three-bracket; ~1.5% effective at $75k-$150k. SS fully exempt as of 2021. Yearfold's calculator uses an effective-rate approximation; real liability may be lower if you qualify for a pension exclusion.

  • Does this apply to property tax too?

    No. This page covers state INCOME tax only. Property tax in North Dakota is set by local jurisdictions (county / city / school district) and varies dramatically within the state. For a complete retirement-cost picture, consult your specific county's tax assessor.

Primary sources

Effective-rate and SS-taxation flags above are derived from these sources. We re-verify each annually.

Related reading

Yearfold is a financial-education tool. It is not a registered investment adviser and does not provide personalized investment, tax, or legal advice. Results are probabilistic projections based on historical data and stated assumptions; they are not guarantees. Methodology

State tax law changes. We update on the cadence noted in methodology; consult your state’s revenue department or a fee-only tax professional for definitive guidance on your situation.