How North Dakota taxes retirement income
North Dakota does not tax Social Security benefits. Pensions and 401(k)/IRA withdrawals are partly taxed (there is an exclusion, then the rest is taxed). Social Security benefits are 100% excludable from ND taxable income (Form ND-1, Line 15, 'Social security benefit exclusion') with no income cap since tax year 2021. Military retirement pay is separately 100% excludable (Line 14, since 2019), as are U.S. Railroad Retirement Board benefits (Line 8) and, since tax year 2023, retirement benefits of licensed peace officers with 20+ years of service or a disability retirement (a dedicated Licensed Peace Officer Retirement Exclusion). However, North Dakota has NO general pension exclusion and NO 401(k)/IRA withdrawal exclusion: the 2025 Form ND-1's full list of subtraction lines (interest from U.S. obligations, long-term capital gain exclusion, Native American exempt income, Railroad Retirement, peace officer retirement, military pay, ND College SAVE, qualified dividend exclusion, military retirement, Social Security) contains no line for ordinary private-sector or government pensions, or for traditional 401(k)/IRA/403(b) distributions, those remain fully taxed as ordinary income at the regular graduated rates (0%/1.95%/2.5%).
Retirement income tax in North Dakota, at a glance
| Income type | Taxed by North Dakota? |
|---|---|
| Social Security | No |
| Pensions | Partially (exclusion applies) |
| 401(k) / IRA withdrawals | Yes |
| Estate / inheritance tax | None |
| Avg. property tax rate | 0.92% of home value |
Does North Dakota tax Social Security benefits?
No. North Dakota does not tax Social Security benefits.
Does North Dakota tax pensions and 401(k) or IRA withdrawals?
Partly. Social Security benefits are 100% excludable from ND taxable income (Form ND-1, Line 15, 'Social security benefit exclusion') with no income cap since tax year 2021. Military retirement pay is separately 100% excludable (Line 14, since 2019), as are U.S. Railroad Retirement Board benefits (Line 8) and, since tax year 2023, retirement benefits of licensed peace officers with 20+ years of service or a disability retirement (a dedicated Licensed Peace Officer Retirement Exclusion). However, North Dakota has NO general pension exclusion and NO 401(k)/IRA withdrawal exclusion: the 2025 Form ND-1's full list of subtraction lines (interest from U.S. obligations, long-term capital gain exclusion, Native American exempt income, Railroad Retirement, peace officer retirement, military pay, ND College SAVE, qualified dividend exclusion, military retirement, Social Security) contains no line for ordinary private-sector or government pensions, or for traditional 401(k)/IRA/403(b) distributions, those remain fully taxed as ordinary income at the regular graduated rates (0%/1.95%/2.5%).
For the mechanics of required withdrawals in retirement, see what is an RMD.
Sources
- North Dakota taxation of retirement income (Social Security, pensions, 401(k)/IRA): North Dakota Department of Revenue / Taxation.