Montana and North Dakota have a reciprocal agreement. If a Montana resident works or performs personal/professional services for an employer in North Dakota, the wages are treated as being earned in Montana and the Montana resident does not have to file a North Dakota income tax return reporting those wages.
What if the employer withheld North Dakota tax?
If the employer withheld North Dakota tax in error, file a nonresident North Dakota return to receive a refund of those withholdings. The taxpayer cannot claim a credit for taxes paid to another state on their return.
How to complete both the Resident and Nonresident Returns to claim a refund of North Dakota tax?
- Create and complete the Montana resident tax return.
- Add or Edit the North Dakota nonresident return and select Basic Information.
- Are you a MN or MT resident filing a North Dakota return solely to claim a refund of North Dakota income tax due to reciprocity? - Select Montana.
- From the drop-down menu for the school if the taxpayer did not maintain a home in North Dakota, select "No School District".
To claim exemption from future North Dakota withholdings, the taxpayer should complete Form NDW-R and give a copy to their employer.
Additional Information: