According to the Civilian Spouses of Military Service Members Guideline, "A civilian spouse’s compensation for work performed in North Dakota is exempt from North Dakota income tax if he or she meets all of the following conditions:
- The civilian spouse and the service member maintain their domicile (or legal residence) in a state other than North Dakota. This condition is met even if each spouse has a different state of domicile.
- The service member’s permanent duty station is in North Dakota
- The civilian spouse is residing and working in North Dakota only because he or she wants to be with the service member.
Veterans Benefits and Transition Act of 2018
A civilian spouse may choose to use the same domicile state as the service-member for state income tax purposes during the marriage.
To claim tax-exempt from North Dakota withholding's:
An eligible spouse can stop the withholding of North Dakota income tax from his or her wages by completing Form NDW-M and giving it to the employer. A copy of the civilian spouse’s dependent military ID card must be attached to Form NDW-M. Form NDW-M is valid only for the calendar year for which it is completed. Additional information may be required.
To claim a refund of taxes withheld from your North Dakota income, follow these steps in the program:
- State Section
- North Dakota Nonresident Return
- Income Subject to Tax
- Enter the amount of W-2 income to exclude in the box labeled "Enter the amount of W-2 income to exclude under the Military Spouses Residency Relief Act" (Do not enter the military service members income here- only the military spouse income.)
Military Spouse income may be taxable on your state return where you file as a resident.