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Tax Information

Benefit Category: State

Income Tax Exemption for retired military pay

HB 1053 passed the 66th legislative session in 2019 exempting 100% of military retirement pay from ND State Income tax. Tax exemption begins for taxable year ending 12/31/2019.

NDCC 57-38-30.3 (2) (s) reads

Reduced by the amount received by a taxpayer as retired military personnel benefits, including retired military personnel benefits paid to the surviving spouse of a deceased retired member of the armed forces of the United States, a reserve component of the armed forces of the United States, or the national guard, but only to the extent the amount was included in federal taxable income.

Military retirees to go to: www.dfas.mil/retiredmilitary to change their North Dakota income tax withholding to zero.

For additional tax filing requirements and other information for military service members, taxpayers may go to www.nd.gov/tax/military.

The definition of "Armed Forces" for the income tax exemption Title 10 USC 101(a) applies which includes: Army, Navy, AirForce, Marine corps, and Coast Guard. 

Property Tax Exemption

Paraplegic disabled veteran. Permanent and totally disabled person confined to wheel chair.

(NDCC 57-02-08, para 20.a)  Property exempt from taxation. All property described in this section to the extent herein limited shall be exempt from taxation:

20.Fixtures, buildings, and improvements up to the amount of valuation specified, when owned and occupied as a homestead, as hereinafter defined, by any of the following persons:

a.      A paraplegic disabled veteran of the United States armed forces or any veteran who has been awarded specially adapted housing by the department of veterans' affairs, or the unremarried surviving spouse if such veteran is deceased, for the first one hundred twenty thousand dollars of true and full valuation of the fixtures, buildings, and improvements.

b.      Any permanently and totally disabled person who is permanently confined to use of a wheelchair, or, if deceased, the unremarried surviving spouse of a permanently and totally disabled person. If the spouse of a permanently and totally disabled person owns the homestead or if it is jointly owned by them, the same reduction in assessed valuation applies as long as both reside thereon. The provisions of this subdivision do not reduce the liability for special assessments levied upon the homestead. The phrase "permanently confined to use of a wheelchair" means that the person cannot walk with the assistance of crutches or any other device and will never be able to do so and that a physician selected by the local governing board has so certified. Any person claiming an exemption under this subsection for the first time shall file with the county auditor an affidavit showing the facts herein required and a description of the property. The affidavit must be open for public inspection. A person thereafter shall furnish to the assessor or other assessment officials when requested to do so any information that is believed will support the claim for exemption for a subsequent year. For purposes of this subsection, and except as otherwise provided in this subsection, "homestead" has the meaning provided in section 47-18-01 except that it also applies to any person who otherwise qualifies under the provisions of this subsection whether or not the person is the head of a family. The board of county commissioners is hereby authorized to cancel the unpaid taxes for any year in which the qualifying owner has held title to the exempt property.  

Disabled Veterans (VA rating 50% or more)

A disabled veteran of the United States armed forces with an armed forces service-connected disability of 50% or greater or a disabled veteran who has an extra-schedular rating to include individual unemployability that brings the veteran's total disability rating to 100% as determined by the Department of Veterans' Affairs, who was discharged under honorable conditions or who has been retired from the armed forces of the United States, or the unremarried surviving spouse if the disabled veteran is deceased, is eligible for a credit applied against the first $6750 of taxable valuation ($150,000 true value) of the homestead owned and occupied by the disabled veteran or unremarried surviving spouse equal to the percentage of the disabled veteran's disability compensation rating for service-connected disabilities as certified by the Department of Veterans' Affairs for the purpose of applying for a property tax exemption. An unremarried surviving spouse who is receiving Department of Veterans' Affairs dependency and indemnity compensation receives a one hundred percent exemption. (NDCC 57-02-08.8

Exemption should be at highest percentage veteran is compensated. If veteran is compensated higher than combined rating the exemption should be at the higher rate. Example: if combined rating is between 50 and 90 but the veteran is compensated at 100% due to Individual Un-employability.  The Veteran’s exemption should be at 100%. Attorney Generals opinion 2008-L12

How to apply:

  1. Provide a copy of the DD Form 214 showing veteran's honorable discharge from active military service if claiming exemption for first time. Requesting a copy of your DD214.
  2. Provide a certificate from the Department of Veterans Affairs certifying to the percentage of service-connected disability when claiming exemption for the first time, or if the veteran receives a change in the percentage of certified rated service-connected disability. Contact your Veteran Service Officer. You can also get a letter from the VA by calling 1-800-827-1000 and ask for a property tax letter. This letter will be sent directly to the Veteran.
  3. Complete Application form. Can be completed online and printed.
  4. Submit required documents to your Tax assessor/ Tax equalization office by February 1 when applying for first time, when your disability rating changes, and when requested to do so there after. Your County may or may not require annual applications be submitted. Find your county assessor Tax equalization office

Senior Citizen Or Permanently And Totally Disabled Renter’s Property Tax Refund

Any person 65 years of age or older with an income of $42,000 or less per year from all sources, including the income of any person dependent upon him or her, may qualify for a renter’s property tax refund up to a maximum of $400.

Any person, regardless of age, who is permanently and totally disabled, with an income of $42,000 or less per year, may also qualify for a renter’s refund. A physician’s certificate or written determination of disability from the Social Security Administration must accompany only the first application.

Renters must file an application for a refund with the Office of State Tax Commissioner before June 1 following the year for which the refund is claimed.

Applications must be sent to: Office of State Tax Commissioner, 600 E. Boulevard Ave., Dept. 127, Bismarck, ND 58505-0599.

A fillable form with instructions can be found at the ND Tax Department website. Visit the ND Tax Department website for more information on the Homestead Credit Act.

Vehicle Excise Tax Exemption

Up to 2 vehicles exempt from Excise tax for a 100% disabled Veteran. Spouse eligible to maintain one vehicle

Discharge Requests

Most Veteran’s benefits require that applicants provide a copy of their Form DD 214 or discharge record, which is evidence of their veteran status. This is an important document and must be safeguarded. In the State of North Dakota separation documents are considered confidential and privileged NDCC 37-18-11 (13). National Guard members may receive a NGB22 and/or NGB23 upon obtaining 20 years of satisfactory service (20 year letter).