Below is a list of credits that are available on your North Dakota return:
Credit for Taxes Paid to Another State
If you were a Full-year resident to North Dakota, you may qualify for a credit if you paid income taxes to North Dakota and to another state from the same income.
Agricultural Commodity Facility Investment Credit
If you made qualifying purchases, improvements or investments in a state approved zone for the North Dakota Renaissance Zone Program, you may be allowed a credit.
Seed Capital Investment Credit
Enter the amount of qualified investments made in a business that is certified for the seed capital investment credit program.
Biodiesel Fuel Supplier Wholesaler Credit
If you are a licensed fuel supplier in North Dakota and you blended biodiesel or green diesel fuel with a minimum 5% blend that meets ASTM specifications, you are allowed a credit that is equal to 5 cents per gallon blended. The unused portion of the current tax year credit may be carried over up to 5 tax years.
Biodiesel Fuel Seller Retailer Credit
A tax credit is allowed to a North Dakota licensed fuel seller (retailer) of biodiesel or green diesel fuel. The credit is equal to 10% of the costs to adapt or add equipment to the seller’s facility in ND to enable it to sell biodiesel or green diesel with a minimum 2% blend that meets ASTM specifications. The credit is allowed in each of 5 tax years, starting with the tax year in which sales of the eligible fuel begin.
Partnership Plan Long-term Care Insurance Credit
If you are a North Dakota resident and paid premiums for a partnership plan long-term care insurance policy, you are allowed a credit. This credit is equal to the premiums you paid during the tax year with a maximum credit of up to $250 ($500 for both spouses if they are both insured).
Angel Fund Investment Credit
Your allowable credit is equal to the smaller of $45,000 or the sum of your Angel investment credit.
Angel Fund Investment Credit Purchased From Other Taxpayer
If the sum of all angel investor credits exceeds the $45,000 allowed, you can carry the unused credit forward for up to 5 years.
Endowment Fund Credit From Passthrough Entity
If you made one or more contributions to a qualified endowment fund totaling at least $5,000, there is a credit allowed.
Housing Incentive Fund Tax Credit
You may enter any unused housing incentive tax credit.
Automation Tax Credit
If you qualified for the automation tax credit under N.D.C.C. § 57-38-01.33, you would have received an approval letter from the North Dakota Office of State Tax Commissioner. You may also include any unused credit carried over from tax years 2014-2017.
Nonprofit Private Primary School Contribution Credit
The 2021 North Dakota Legislature made permanent the changes made by the 2019 North Dakota Legislature to the law governing this credit. In addition, the amount of the tax liability that may be reduced by the credit was increased from 25% to 50% for tax years 2021 and after. Except where stated otherwise, the information provided here reflects the law in effect for tax years 2019 and after.
There are three income tax credits available for making a charitable contribution to nonprofit private schools in North Dakota. They are as follows:
- Credit for contributing to a nonprofit private primary school (grades kindergarten through 8).
- Credit for contributing to a nonprofit private high school (grades 9 through 12).
- Credit for contributing to a nonprofit private college.
The credits are allowed for contributions made by an individual, C corporation, and passthrough entity. A passthrough entity means an estate, trust, partnership, S corporation, and a limited liability company treated like a partnership or S corporation. A list of the eligible schools within each of the three categories of schools is provided in the instructions to Schedule ND-1PSC (individual), Schedule 38-TC (estate or trust), Form 58 (partnership), and Form 60 (S corporation). For a C corporation, the list is provided in the separate Corporation Income Tax Credits booklet.
If a contribution is made to a school network fund benefiting multiple eligible schools, or to an eligible school falling into both the primary school and high school categories, a statement must be obtained from the network or school identifying the eligible school and category to which the contribution is designated along with the amount contributed. If a statement is not obtained in the case of a contribution to an eligible school falling into the primary school and high school categories, one-half of the contribution will be deemed to have been made in each category.
Generally, the credit must be claimed on the income tax return filed for the tax year in which the contribution is made; however, an election may be made, on a contribution by contribution basis, to treat a contribution as having been made in the previous tax year if it is made on or before the due date, including extensions, for filing the state income tax return for the previous tax year.
Individual or C Corporation: For an individual or C corporation, the amount of the credit allowed in a tax year for a particular category of school equals the lesser of the following:
- 50% of contributions made directly to eligible schools within the category plus any nonprofit private school credit for the same school category received from a passthrough entity.
- 50% of the tax liability before credits for the tax year. (Note: For tax years 2019 and 2020, it was 25% of the tax liability before credits.)
Passthrough Entity: For a passthrough entity, the amount of the credit allowed in a tax year for each category of school is determined by multiplying the contributions made directly to eligible schools within a category by 50%. The resulting credit is passed through to the entity’s owners or beneficiaries based on their respective interests in the entity. Except for an estate or trust, any nonprofit private school credit received from another passthrough entity is passed through to the entity’s owners.
An estate or trust that receives a nonprofit private credit from another passthrough entity may either retain the credit or pass it through to its beneficiaries. If an estate or trust retains a credit received from another passthrough entity, the estate or trust may claim the lesser of (1) the amount of the credit received, (2) 50% of the estate’s or trust’s tax liability before credits, or (3) $2,500. (Note: For tax years 2019 and 2020, it was 25% of the tax liability before credits.)
Automation Tax Credit
For tax years 2019-2022 , if you qualify for the automation tax credit under N.D.C.C. § 57-38-01.36, you would have received an approval letter from the North Dakota Office of State Tax Commissioner. You may also include any unused credit carried over for 5 tax years.
Developmentally Disabled/Mentally Ill Employee Tax Credit
If you qualify for the developmentally disabled or mentally ill employee tax credit you would receive a letter from the Department of Human Services and Vocational Rehabilitation Services in North Dakota. The maximum credit per employee is $1500.
Family Member Care Tax Credit-Schedule ND-1FC
A tax credit for payment of expenses to care for elderly or disabled family member.
Where do I enter this in my account?
To enter these credits on your North Dakota return, follow the steps below:
- State Section
- North Dakota Return
For more information regarding these credits, please click here.