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May 9, 2023
2023-0849

North Dakota law lowers personal income tax rates retroactive to January 1, 2023

On April 27, 2023, North Dakota Governor Doug Burgum signed into law H.B. 1158, which retroactive to January 1, 2023, lowers the state's personal income tax rates by collapsing the tax brackets from five to three with tax rates of 0%, 1.95% and 2.5%. Under prior law, the highest tax rate was 2.9%. (The new tax tables for 2023 are reprinted below.)

Governor Burgum stated that H.B. 1158 represents the largest income tax relief package in the state's history.

The revised withholding tables and formula, once available, will be posted here.

Supplemental wages

Under the current withholding guidelines, the supplemental rate of withholding for irregular payments, such as bonuses, is 1.84%. It is assumed that this rate will be reduced once the North Dakota withholding tables and formula are updated to reflect the tax cuts under H.B. 1158. (2023 North Dakota Income Tax Withholding Rates and Instructions, p. 58.)

H.B. 1158

North Dakota personal income tax rates effective January 1, 2023

____________________________________________________________________

Single, other than head of household or surviving spouse

If North Dakota taxable income is:

Over

But not over

The
tax is equal to

Of
amount over

$0

$44,725

$0.00 + 0.00%

$0

$44,725

$225,975

$0.00 + 1.95%

$44,725

$225,975

 

$3,534.38 + 2.50%

$225,975

Married filing jointly and surviving spouse

If North Dakota taxable income is:

Over

But not over

The
tax is equal to

Of
amount over

$0

$74,750

  $0.00 + 0.00%

$0

$74,750

$275,100

  $0.00 + 1.95%

$74,750

$275,100

 

  $3,906.83 + 2.50%

$275,100

Married filing separately

If North Dakota taxable income is:

Over

But not over

The
tax is equal to

Of
amount over

$0

$37,375

$0.00 + 0.00%

$0

$37,375

$137,550

$0.00 + 1.95%

$37,375

$137,550

 

$1,953.41 + 2.50%

$137,550

Head of household

If North Dakota taxable income is:

Over

But not over

The
tax is equal to

Of
amount over

$0

$59,950

$0.00 + 0.00%

$0

$59,950

$250,550

$0.00 + 1.95%

$59,950

$250,550

 

$3,716.70 + 2.50%

$250,550

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (kristie.lowery@ey.com)
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

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