Income Tax Withholding

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Businesses may have to submit North Dakota income tax withholding if they are:

  • An employer paying wages to an employee if the employee performs services in North Dakota and the wages are subject to federal income tax withholding.
  • A North Dakota-based employer paying wages to a North Dakota resident employee who works in another state, except when the employer is required to withhold the other state's income tax from the wages earned in that state.

Certain wages are not subject to North Dakota income tax withholding, such as wages paid by a farmer or rancher, or wages exempt from federal income tax withholding.

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Employers must register for an Income Tax Withholding account with the Office of State Tax Commissioner online through the North Dakota Taxpayer Access Point (ND TAP). Register here: North Dakota Taxpayer Access Point

North Dakota relies on the federal Form W-4 (Employee’s Withholding Allowance Certificate) to calculate the amount to withhold.

For more information regarding income tax withholding, see:

If you need to update the individual responsible for filing the sales and use and withholding returns, please see Declaration of Managers, Members, Governor's, Partners, and Corporate Officers.

Filing a Return

Employers must electronically file Form 306 – Income Tax Withholding Return and remit the amount of North Dakota income tax withheld quarterly if one of the following applies:

  • The amount required to be withheld from wages paid during the previous calendar year is $1,000 or more.
  • The employer contracts with a third-party payroll service provider to file and remit North Dakota income tax withheld on the employer’s behalf, and the third-party payroll service provider electronically files and remits the employer’s withholding taxes for federal tax purposes.

Form 306– Income Tax Withholding Return must be filed even if an employer did not pay any wages during the period covered by the return.

Reconciling your Account- Filing your annual W-2’s, 1099’s, etc.

Any business who has an open withholding account with the Office of the State Tax Commissioner is required to submit a Form 307. This requirement is fulfilled through the process of electronically filing the following forms on or before January 31st of the following year:

  • W-2
  • 1099 (forms that have North Dakota state income tax)

The following forms must also be filed on or before the due date established by the IRS:

  • 1099
  • 1042-S
  • W-2G

Things to Note:

  • Electronic filing through ND TAP or an accounting software satisfies the filing of the North Dakota Transmittal of Wage and Tax Statement, Form 307.
  • Electronic filing of Form 307 is required even if there are no W-2s to report.

Form 306 – Income Tax Withholding return

Electronically filing returns can be completed in one of the following ways:

  • ND TAP
  • ACH Credit - for more information, see the "Payment Options" dropdown below.

If you are not required to file electronically, complete Form 306 – Income Tax Withholding Return.

Form 307 / Form W-2 or 1099 – Annual Reconciliation

Electronic filing your Form W-2 or any information return (Form 1099, 1042-S, or W-2G) can be completed in one of the following ways: 

  • ND TAP
  • Electronic upload through accounting software (if supported)

How to Amend/Correct Form 306

Correcting electronically filed returns can be completed through ND TAP.  If you are not required to file electronically, complete Form 306 – Income Tax Withholding Return and fill in the “amended” circle.

How to Amend/Correct W-2s or 1099s

If a W-2c is filed with the Internal Revenue Service to report a correction, a copy of the corrected form must be filed electronically with North Dakota. Instructions on how to complete a corrected W-2 are available from the Social Security Administration. This includes any correction, including a change to the name or federal identification number of the employee or payee. If a correction needs to be made only to the state information on the form, and a corrected form is not going to be filed for federal purposes, report the correction electronically through ND TAP.

The corrected forms can be filed in ND TAP, the data can be uploaded or manually keyed from the returns:

  1. Go to www.tax.nd.gov/tap.
  2. If new to ND TAP, select Sign up for Access to create an account. If an existing user, select Log In.
  3. After logging into account, under the “I want to” tab select Upload / Enter W-2s or W-2c.

Tip: If using ND TAP only to file information returns, select Third party access when signing up for access.

Corrections to Federal Form 1099 should be made using Form 1099 with the box marked corrected. Paper forms can be obtained by calling the IRS at 1-800-829-3676. All corrections to 1099-MISC and 1099-NEC forms must be reported to our office. This includes corrections to a recipient’s name and/or federal identification number.

For Form 1099 corrections in which no North Dakota income tax was withheld, mail a copy of the corrected 1099 to the Office of State Tax Commissioner.

Pay Online - Fast and Convenient!

Make an income tax withholding payment electronically to the Office of State Tax Commissioner by using ND TAP.

           There are two different ways taxpayers can pay for the returns they file.

  1. ACH Debit (Free Electronic Payment): The employer files the income tax withholding return by using ND TAP. Then, the employer authorizes the State of North Dakota to electronically transfer the payment from the employer’s bank account to the State’s bank account. With this method, the Office of State Tax commissioner pays all associated bank fees.
  2. ACH Credit: The employer instructs its bank to make an ACH Credit payment to the Office of State Tax Commissioner with information to identify the payment as an income tax withholding return. The ACH Credit acts as the return (nothing else needs to be filed or sent to our office).
    • Information for initiating an ACH Credit Payment is available on page 10 of the ACH Credit PDF.

Please note: Making a non-logged payment in ND TAP does not file your Form 306 – Income Tax Withholding Return.

Mail- Check or Money Order

If you are unable to pay using ND TAP, you may pay by check or money order, made payable to North Dakota Office of State Tax Commissioner. Complete and print the payment voucher on ND TAP and mail both to the Office of State Tax Commissioner at 600 E. Boulevard Ave. Dept. 127, Bismarck, ND 58505-0599. 

Supplemental Wages

Wages that are treated as supplemental wages for federal income tax withholding purposes, as described in the IRS's Publication 15 (Circular E), Employer's Tax Guide, are treated as supplemental wages for North Dakota income tax withholding purposes. They include, but are not limited to, bonuses, commissions, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, and taxable fringe benefits.

Calculating the amount of North Dakota income tax to withhold from supplemental wages is like the method used for federal income tax withholding purposes, which depends on whether the supplemental wages are separately paid or separately identified from regular wages.

  • Supplemental wages not separately paid or identified from regular wages:
    • If you include supplemental wages with regular wages in a single payment but do not separately identify each amount, calculate the amount to withhold from the payment in the usual manner using one of the two regular withholding methods.
  • Supplemental wages separately paid or identified from regular wages:
    • If you pay supplemental wages separately from a regular wage payment, or you combine the supplemental wages and regular wages into one payment and separately identify each amount, calculate the amount of North Dakota income tax to withhold from the supplemental wages under one of the following options:
      1. Multiply the supplemental wages by 1.5% (.015).
      2. Calculate the amount to withhold from the supplemental wages in the following steps:
        • If supplemental wages are to be paid at the same time as a regular wage payment, add the supplemental wages to the regular wages. Or, if supplemental wages are to be paid separately from a regular wage payment, add the supplemental wages to the amount of regular wages paid (or to be paid) for the most recent payroll period.
        • Calculate the withholding amount on the combined amount of supplemental and regular wages in the usual manner using one of the two regular withholding methods.
        • Subtract the amount of income tax withheld (or to be withheld) from the regular wage payment from the withholding amount calculated on the combined amount.

For more information, including examples of how to calculate withholding on supplemental wages, see the Income Tax Withholding Rates & Instructions.

Bulk Filers

Bulk filers can use ND TAP to file multiple returns at one time. More instructions are included in the Guideline - Income Tax Withholding.

Reciprocity

Income tax reciprocity agreements between North Dakota and Minnesota and Montana provide that wages paid to residents of Minnesota and Montana for services performed in North Dakota are exempt from North Dakota income tax withholding. To be exempt, the employee needs to complete and give to their employer the Reciprocity Exemption from Withholding for Qualifying Minnesota and Montana Residents Working in North Dakota form (Form NDW-R). The form needs to be given to their employer by February 28, or within 30 days after the employee begins work or changes their permanent address.

The form must then be mailed on or before March 31 to the Office of State Tax Commissioner. The employee must complete a new form and give it the employer each year to continue the exemption.

Need Help With Filing?

For more information or instructions regarding requirements to electronically file returns or make payments, see the Guideline - Income Tax Withholding & Information Returns. If you have questions, please contact us:

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