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FAQ Articles

I am a Minnesota resident and I have income other than wages from sources in North Dakota. Is my income eligible for exemption from the North Dakota-Minnesota income tax reciprocity agreement?

Compensation that a Minnesota resident receives for personal or professional services performed in North Dakota is exempt from North Dakota income tax under the reciprocity agreement if the individual maintains a permanent home in Minnesota to which the individual returns at least once each month while performing the services in North Dakota. “Compensation for personal or professional services” includes wages, salaries, tips, and commissions that an employee receives from an employer and, in limited cases, distributions from a partnership.

The following types of income that a Minnesota resident receives from sources in North Dakota are not eligible for exemption under the reciprocity agreement: (1) Income from tangible property, such as rents, royalties, and gains from its sales or exchange; (2) Income from gambling activity; (3) Income from a subchapter S corporation, other than wages; (4) Income from a business that is derived from the sale of goods; and, (5) Income from a business that provides personal or professional services where the sale of goods or the services of employees is more than incidental to the production of the income. For more information on situations involving income from a business conducted in North Dakota, contact the North Dakota Office of State Tax Commissioner by calling 701.328.1247, or go to our website.

nd.gov - The Official Portal for North Dakota State Government
North Dakota: Legendary. Follow the trail of legends

Ryan Rauschenberger
Tax Commissioner
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FAQ Articles

I am a Minnesota resident and I have income other than wages from sources in North Dakota. Is my income eligible for exemption from the North Dakota-Minnesota income tax reciprocity agreement?

Compensation that a Minnesota resident receives for personal or professional services performed in North Dakota is exempt from North Dakota income tax under the reciprocity agreement if the individual maintains a permanent home in Minnesota to which the individual returns at least once each month while performing the services in North Dakota. “Compensation for personal or professional services” includes wages, salaries, tips, and commissions that an employee receives from an employer and, in limited cases, distributions from a partnership.

The following types of income that a Minnesota resident receives from sources in North Dakota are not eligible for exemption under the reciprocity agreement: (1) Income from tangible property, such as rents, royalties, and gains from its sales or exchange; (2) Income from gambling activity; (3) Income from a subchapter S corporation, other than wages; (4) Income from a business that is derived from the sale of goods; and, (5) Income from a business that provides personal or professional services where the sale of goods or the services of employees is more than incidental to the production of the income. For more information on situations involving income from a business conducted in North Dakota, contact the North Dakota Office of State Tax Commissioner by calling 701.328.1247, or go to our website.

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