North Dakota has income tax reciprocity agreements with Montana and Minnesota.
If the taxpayer is a resident of North Dakota and maintains a permanent home in North Dakota to which they return at least once each month during the time they work in Minnesota, the compensation received for personal or professional services performed in Minnesota is not taxable by Minnesota. Also, wages received for work performed in Montana while a resident of North Dakota are not taxable by Montana.
If the taxpayer received wages covered by reciprocity and the employer withheld Minnesota or Montana income tax from them, file a nonresident income tax return with the applicable state to obtain a refund of the amount withheld.
North Dakota Return:
- Personal Information
- Other Categories
- Reciprocal State - Select the Reciprocal State or "Blank Reciprocal Agreement".
If the other state is Minnesota:
- Add or Edit Minnesota Nonresident Return
- Basic Information - Select your state of residency
- Return to Michigan Main Menu
- Residents of Michigan and North Dakota - Enter the taxable income as a positive number. (This number should match the federal taxable income.
The taxpayer should file Form MWR, Reciprocity Exemption/Affidavit of Residency with their employer to avoid Minnesota tax withholdings.
If the other state is Montana:
- Add or Edit Nonresident Montana Return
- Basic Information - Answer the residency question.
The taxpayer should file Form MW-4, Reciprocity Exemption/Affidavit of Residency with their employer to avoid Montana withholdings.
Additional Information:
North Dakota State Tax Information
North Dakota Resident Return Instructions