Marriage Penalty Tax Credit

Married individuals are eligible for an income tax credit if all the following apply:

• They file a joint North Dakota income tax return.
• Both have qualified income. Qualified income means the sum of the following, to the extent included in North Dakota taxable income:
  • Wages, salaries, tips, bonuses, and any other compensation that is reportable as taxable wages on Form W-2.
  • Net self-employment income subject to the federal self-employment tax reduced by the amount of the self-employment tax deduction, as reported on Form 1040 – Schedule SE.
  • Taxable portion of social security benefits and distributions from IRAs, pensions, and annuities. Do not include any social security benefits or U.S. Railroad Retirement Board benefits that are deducted from North Dakota taxable income.
• Their joint North Dakota taxable income and the qualified income of the spouse having the lower qualified income exceed certain threshold amounts.

Due to the indexing of certain amounts for inflation each year, the formula for calculating the credit and the maximum credit allowed will generally change each year. For details on the eligibility criteria and the calculation of the credit, see the Marriage Penalty Credit Worksheet in the instructions to Form ND-1 for the applicable tax year.

Not Applicable.

N.D.C.C. § 57-38-01.28