What type of income can I subtract from my North Dakota return?

Interest From US Obligations 

List the interest or dividend income from U.S. Savings Bonds and Securities that is included in your federal adjusted gross income that came from U.S. government obligations that is exempt from North Dakota tax.

ND Net Long-term Capital Gain (loss)

You can exclude 40% of the gain from your North Dakota income if it is included in your federal taxable income. If you were a nonresident or part year resident of North Dakota for the current tax year, only a net long-term capital gain reportable to North Dakota is eligible for the subtraction. 

Exempt Income Of An Eligible Native American

You may enter your income from Indian reservation sources if you are a an enrolled member of a federally-recognized Indian tribe. Do not list income earned outside of the reservation.

Benefits Received From US Railroad Retirement Board

Enter the portion of any unemployment, sick pay, or retirement benefits that were received from the U.S. Railroad Retirement Board that was included in your federal taxable income.

Licensed Peace Officer Retirement Benefits Exclusion

This exclusion is allowable for a retired licensed peace officer with a minimum of 20 years of service or that was retired disabled. 

Military Pay Exclusion

You may subtract the amount reported on your federal return of the military pay you received as a member of the U.S. Armed Forces on active and reserve duty and a member of the national guard. Military pay for purposes of this deduction is all military pay, including federal pay for training, education, mobilization, and bonuses and state pay when called to state active duty.

College SAVE Account Deduction

You are allowed a deduction for the contributions you made to a SAVE account administered by the Bank of North Dakota of up to $5,000 ($10,000 if Married Filing Jointly). You are eligible for this deduction regardless of whether you or someone else owns the account. 

Qualified Dividend Exclusion

Full year, part-year, and nonresidents of North Dakota for the current tax year, multiply the qualified dividends from Form 1040 or 1040-SR, line 3a, by 40 percent and enter the result.

Military Retirement Benefit Exclusion

If you are a retired military service member, or a surviving spouse of a deceased retired military service member of the U.S armed forces or reserves, you may subtract the amount of benefits received reported on your federal return on Form 1040 or 1040-SR, line 5b.

Statutory Adjustments - Schedule ND-1SA

• Renaissance zone income exemption
• New or expanding business income exemption
• Human organ donor expense deduction
• Employee workforce recruitment exclusion
• Stillborn child deduction
• Employer reimbursement of college expenses which is included in taxable wages on Form W-2
• Income from S Corporation taxed as C Corporation

Servicemember Civil Relief Act Adjustment - (Nonresident Return only).

Enter your amount of your compensation received for active duty in the U.S. armed forces, or for active duty in the commissioned corps.

Where to enter subtractions from North Dakota income?

You can enter these subtractions on your North Dakota return by following the steps below:

1. State Section
2. Edit North Dakota return
3. Begin on Subtractions from Income 

For more information regarding these subtractions, please click here.