1. North Dakota Office of State Tax Commissioner
2008 Individual Income Tax
Cory Fong, Tax Commissioner
Form ND-1
Dear Taxpayer,
Last year, over 60 percent of the state individual income tax returns were filed
Not sure if you should
electronically. Taxpayers have found e-file offers several benefits compared
E-File? Consider the
benefits:: to filing a paper return. And taxpayers who use Direct Deposit find that they
receive their refund even faster—usually in about five days. If you are eligible
for a refund, I encourage you to use both the e-file and Direct Deposit options.
1. Receive your
refund quicker!
E-file is more accurate than a paper return because the computer automatically
checks e-filed returns for errors. This means fewer delays and faster processing,
2. For the fastest
refund - use Direct something that taxpayers find particularly helpful during the last-minute filing
Deposit - see page
rush.
15 for details.
If you have been using e-file, I hope you will continue to do so. If you have
Direct
Deposit not used e-file yet, I hope you will give it try this year. E-file is simple and quick
®
3. Increased accuracy to use.
- especially during
If you are expecting a refund, you can check its status on our web site under
the last minute
filing rush.
“Where’s My Refund?” There you will learn if your return was received, if it is
being processed, and the date your refund was issued.
4. E-File lets you
know when the
To learn more about e-file, to track your refund, or for other tax-related
return has been
information, please visit our web site at www.nd.gov/tax.
accepted
Please let us know what you think we are doing well and what we can do to
5. Correct errors
improve our service to you. Our phone number, address, and e-mail information
quickly.
is found on the back of this booklet.
6. Nothing to mail!
Thank you,
7. Software simplifies
the filing process See page 16 for details
and you can be on using your credit
Cory Fong, card to pay your taxes.
sure you are using
the correct forms.
Tax Commissioner
ndTax
Visit our web site for forms or to
learn about North Dakota’s taxes:
www.nd.gov/tax.

2. This booklet contains the following forms—
Form ND-1 Schedule ND-1NR Schedule PT
Contents
Specific line instructions for Form ND-1 ............ 8
Refund of local sales tax .......................... This page
Use tax requirement ............................... This page Direct deposit of refund ................................ 15
Privacy Act information ........................... This page Credit card payment .................................... 16
Changes for 2008. .............................................. 1 Instructions for Schedule PT.......................... 16
Electronic filing and direct deposit options .............. 3 List of school district codes ........................... 19
Tips for trouble-free filing .................................... 3 2008 Form ND-1 Tax Table ............................ 20
General instructions Need forms or assistance...................Back cover
Which form to use ........................................... 4 Check the status of your refund ..........Back cover
Who must file ................................................. 4 Request a copy of your return
Native Americans ............................................ 5 or other information ........................Back cover
Reciprocity ..................................................... 6
When and where to file .................................... 6
Taxpayer Bill of Rights
Extension of time to file ................................... 6
Penalty and interest......................................... 7 You may get a copy of the North
Dakota Taxpayer Bill of Rights by
Copy of federal return ...................................... 7
contacting the Office of State Tax
Changing your return....................................... 7
Commissioner or
Estimated tax requirement (for 2009) ................ 7
visiting our web site at
How to file a return for a deceased taxpayer ....... 8
www.nd.gov/tax
General instructions for completing Form ND-1.... 8
If you need a form or document mentioned in this booklet, you may obtain it from our web site at www.nd.gov/tax, or
request it by phone, e-mail, fax, or letter—see the back cover of this booklet for phone numbers and addresses.
You might be eligible for a refund of local sales tax!
Beginning October 1, 2005, most city and county local tax ordinances contain a local sales tax maximum. If a customer
exceeds that maximum, they may apply to the state Tax Department for a refund of the amount of local tax paid that
exceeds that maximum. The local sales tax maximum varies between local taxing jurisdictions and ranges from $25 to
$50. For example, you purchase $4,000 of furniture in a city that has a one percent sales tax and allows for a $25 local
tax maximum. The retailer will collect $200 in state sales tax and $40 in local tax at the time of purchase. You may then
apply to the Tax Commissioner for a refund of $15 ($40 local tax paid - $25 local tax maximum). You can access the form,
Claim For Refund of City or County Sales and Use Tax Transmittal, on our web site at www.nd.gov/tax or by calling
(701) 328-1246 or e-mailing salestax@nd.gov.
Do you owe use tax?
If you purchased goods from outside North Dakota or outside the U.S., you might owe state and local sales tax.
Technically, what you have to pay is called a use tax. It applies to the same goods that are subject to North Dakota’s sales
tax. The use tax applies whether you purchased goods in person at an out-of-state location, by mail, phone, or the Internet.
If you didn’t pay any sales tax or you paid tax to another country at the time of purchase, you must pay the use tax at the
North Dakota sales tax rate. If you did pay sales tax to another state but you paid less than what you would have paid in
North Dakota, the difference between the rates is the amount of use tax you owe.
If this applies to you, you must file a North Dakota Use Tax Return. You can access the form on our web site at
www.nd.gov/tax or call the Sales Tax Compliance Section at (701) 328-1246.
Privacy Act information. In compliance with the Federal Privacy Act of 1974 (Public Law 93-579), the disclosure of an individual’s
social security number on the North Dakota income tax return and any required schedules is mandatory and is required under subsections
1 and 7 of North Dakota Century Code § 57-38-31. An individual’s social security number is used as an identification number by the
North Dakota Office of State Tax Commissioner for file control and recordkeeping purposes, and for cross-checking an individual’s files
with those of the Internal Revenue Service.

3. North Dakota 1
Changes affecting you and your income tax
Developments, updates, and items of interest relating to individual income tax
classification is based on how the property For other special situations, go to the
Later than usual mailing is classified by the county for property Office of State Tax Commissioner’s
tax purposes. Its classification is not website at www.nd.gov/tax and click on
of income tax booklets
necessarily based on its location or use. Property Tax Relief on the left-hand side
Traditionally, the income tax booklet For example, an apartment building having of the page.
is mailed to taxpayers on or after up to three apartment units is classified as
December 26th. The mailing of the 2008 residential. However, an apartment building
Carryover of unused 2007
booklet, however, was delayed because of having four or more apartment units is
property tax relief credits
the property tax relief income tax credit classified as commercial, regardless of its
Two new lines have been added to Form
law. The printing of the booklet had to be location or use for residential purposes.
ND-1 on which to enter the amount of an
delayed until after November 15th, which
Leased (or rented) property—If property unused 2007 property tax relief credit.
was the date on which the Tax Department
is leased, only the property’s owner may Line 21a was added for an unused 2007
was required to determine the total property
claim the credit. The lessee may not claim residential and agricultural property tax
tax relief income tax credits claimed for the
the credit, even if the lessee agrees as part credit, and line 21b was added for an
2007 tax year. If the total credits reached or
of the lease contract to pay the property unused 2007 commercial property tax
exceeded statutorily set threshold amounts,
taxes. credit. Do not enter any unused 2007
changes would have been required to be
property tax credit on Schedule PT.
made to how the credits are calculated, Life estate—A common situation involves
resulting in reduced credits being allowed parents placing the deed to their home Important: In the case of an unused 2007
on the 2008 income tax return for some in the name of one of their children and residential and agricultural property credit,
taxpayers. The changes would have retaining a life estate in the home. This if an individual elected to receive a 2007
affected Schedule PT, which is included in allows the parents to continue living in Property Tax Relief Certificate for the
this booklet. the home with all rights and obligations of amount of the unused credit, the unused
ownership until their death, at which time credit should not be entered anywhere on
all ownership rights pass to the child. In the 2008 return.
this case, the life estate holder (parents)
Property tax relief
may claim the credit.
income tax credits for
Marriage penalty tax
Grantor-type trust—Generally, property
2008
placed in a trust is not eligible for the credit for joint filers
property tax relief credits. One exception
applies to what is known as a “grantor-type
Eligible property taxes
trust.” In general, this is a trust over which Changes for 2008
The 2008 income tax year is the second
the grantor—that is, the person who places
year of the two-year property tax relief
The calculation of the marriage penalty
the property in the trust—retains the power
income tax credit program enacted by
credit for 2008 was changed as follows:
to revoke or control the trust, in which
the 2007 North Dakota Legislature. For
case the grantor (and not the trust) is still
purposes of calculating the credits on • The amount allowed as a deduction in
considered the owner of the property in
the 2008 income tax return, the eligible calculating the taxable income of the
the trust for federal income tax purposes.
property taxes are the 2007 real estate spouse with the lower earned income
Assuming all other eligibility requirements
tax and the 2008 mobile home tax that was increased from $8,750 to $8,950.
are met, the grantor of this type of trust
became due in the 2008 calendar year. To This number is made up of one personal
may use the property taxes on the property
be eligible to claim these property taxes in exemption and one-half of the standard
in the trust for the credit.
calculating a property tax relief credit, you deduction amount for married persons
must have owned the eligible property on filing jointly, which for 2008 equal
Property or parcel number—Many
the due date of these taxes. The 2007 real $3,500 and $5,450, respectively.
taxpayers did not enter the correct property
estate tax became due on January 1, 2008, or parcel number on Schedule PT, the • The maximum credit allowed was
and the 2008 mobile home tax became due supplemental schedule to Form ND-1 increased from $300 to $305 as a result
on January 10, 2008. on which the credits are calculated. This of indexing the amount for inflation.
number is a multiple-digit number, which
• The joint North Dakota taxable income
may also include alphabetic letters, that
Special situations
threshold and the earned income
is called a “property number” or “parcel
Following are special situations that
threshold of the spouse with the lower
number” on the property tax statement.
generated some of the more common
earned income were changed to $54,454
Do not use the property’s address or legal
questions about the property tax credits.
and $30,854, respectively. These are
description.
the amounts below which no credit is
Property classification—Many taxpayers
generated.
did not know whether they had residential,
agricultural, or commercial property. The

4. North Dakota
2
Changes affecting you and your income tax (continued)
make their estimated payments. Instead, recruitment exclusion— if all of the
All of the changes have been included
most individuals use a voucher that is following conditions are met:
in the calculation worksheet for 2008 on
downloaded and printed from the Tax
page 12 of this booklet.
1. The individual’s employment qualifies
Department’s website or from tax software
the individual’s employer for the
acquired by them or their tax preparers. For
workforce recruitment income tax credit.
Not all joint filers receive the this reason, the Tax Department is cutting
marriage penalty tax credit back the number of estimated tax form 2. The individual receives a statement from
packages that will automatically be mailed the employer verifying the employer’s
The first year the marriage penalty tax to individuals who make estimated tax eligibility for the workforce recruitment
credit was allowed was 2007. Some payments. Starting with the 2009 estimated income tax credit and identifying the
married taxpayers who filed a joint 2007 tax form package to be mailed in early excludable income, which must consist
return found that their calculation resulted 2009, the automatic mailing will only go of a hiring bonus, moving expense
in no credit for them. Based on the to those individuals who used the 2008 payment, or a nontypical fringe benefit.
conditions set out in the instructions to the estimated tax payment voucher that was
For more details about the workforce
return, they thought that they would get a mailed to them by the Tax Department. An
recruitment income tax credit, see the
tax credit. individual who does not receive the 2009
instructions to the 2008 Schedule ND-1TC,
estimated tax payment package, but would
The calculation of the credit is prescribed line 13.
like one, may contact the Tax Department
by statute, which sets out a calculation
to request one—see the back cover of this
method intended to keep the calculation
booklet.
reasonably simple and to allow for
Forms changes to note
consistent application. Whether or not a
credit amount is generated will depend
On Form ND-1, page 2, the credit section
on how the spouses’ fact situation fits National Guard or of the form was restructured for 2008, and
into the statutorily-prescribed calculation.
Reserve member two new lines were added on which to enter
The North Dakota taxable income and
deduction is clarified a carryover of an unused 2007 property tax
earned income thresholds shown in the
income tax credit. Schedules ND-1SA (state
instructions to Form ND-1 only serve
The instructions to the deduction currently adjustments) and ND-1TC (tax credits),
to show the amounts below which the
allowed to a member of the National Guard which were combined on one form for
prescribed calculation will not generate a
or the U.S. armed forces reserve who 2007, will be on separate forms for 2008.
credit of at least $1.00.
enters federal active duty were changed. Also, revisions were made to Schedule PT
Historically, it has been difficult to develop The change clarifies that the deduction is (property tax credits) to provide additional
a deduction or credit within the federal allowed regardless of whether the member guidance to taxpayers.
and state income tax structures that simply is involuntarily ordered to such duty or the
negates the so-called “marriage penalty.” In member volunteers for such duty. In either
many cases, too, a “marriage penalty” does case, though, the member will receive
New helpline phone
not exist on a joint return filed by married orders reflecting that the service is under
numbers
persons; instead, there is a “marriage Title 10 of the U.S. Code. The deduction
bonus” because the tax on a joint return is not allowed for service under Title 32
is less than the combined taxes on single The phone numbers for tax questions and
of the U.S. Code, which means service
returns. forms have been changed as follows:
under the command of the governor and
adjutant general. The deduction also is not • Toll-free 1-877-328-7088
allowed if the compensation is received for (in North Dakota)
Mailing of estimated tax attending basic military training, annual
• Bismarck-Mandan local calling area, or
training, or professional military training or
forms cut back for 2009 from outside North Dakota—
developmental education.
Questions (701) 328-1247
In past years, if an individual made one or
more estimated North Dakota income tax Forms (701) 328-1243
New income exclusion
payments for a tax year, an estimated tax
Individuals needing help due to speech or
form package—consisting of Form 400-ES, allowed to certain newly hearing impairment may continue to call
four payment envelopes, and instructions—
hired employees Relay North Dakota at 1-800-366-6888,
was automatically mailed to the individual
and then ask for one of the above numbers.
for the following tax year. However,
An individual is eligible for an income
most individuals do not use the vouchers
exclusion—called the employee workforce
mailed to them by the Tax Department to

5. North Dakota 3
Tips for trouble-free
Your electronic options for fast results! filing
A complete and accurate return ensures
the fastest processing of your return as
If you haven’t tried
well as a fast refund. Errors or omissions
E-file yet, we encourage
in the return mean delayed processing
you to give
and possibly having to contact you.
it a try.
Electronic filing option Important: A return missing a signature
(E-file) or a copy of the federal return is not
Join over
a properly filed return, and it will be
201,000
One-Stop Filing!
sent back to you. This could result in
other North
E-file is the fastest way to file your late filing and payment charges if you
Dakota taxpayers
return and receive your refund. The resubmit the return after the due date.
now using E-file to
speed and accuracy of computers allow
Before you file, check the
file their North
electronic returns to be processed faster following—
Dakota returns.
than paper returns. And the possibility
Write legibly
of errors and delays is greatly reduced.
Our inability to read your information
You may be eligible for may result in errors.
North Dakota participates in the
FREE E-file!
Internal Revenue Service’s Federal/ Enter your correct social
State E-file program. This program security number
Several tax preparers, tax preparation
allows you to electronically file both We use this number to identify your
software providers, and Internet on- return. If married, include your
your federal return and Form ND-1 at
line services offer free or discounted spouse’s social security number.
the same time. You can take advantage
electronic tax filing. For more
of it in one of the following three ways: Check your math
information on who provides these Math errors are one of the most
1. Ask your tax preparer services and on E-file in general, log common errors made.
If your tax preparer is an Authorized on to our web site at: Include all Form W-2s
IRS E-file Provider, your preparer can
www.nd.gov/tax. Click on Be sure to include a copy of all
electronically file your federal and
Individual Income, then Electronic your W-2s. Also include a copy of
North Dakota returns. Many Volunteer any Form 1099 or North Dakota
Filing in the drop-down list.
Income Tax Assistance (VITA) or Tax Schedule K-1 showing North Dakota
Counseling for the Elderly (TCE) sites income tax withholding.
Direct
set up by the IRS are Authorized IRS
Use the right address
E-file Providers. Amazingly, thousands of North Dakota
Deposit
2. Off-the-shelf software returns are mailed to the Internal
®
Revenue Service by mistake each year.
With a computer, Internet access, and
Use the preprinted envelope in this
the right software, you can file your
booklet.
federal and North Dakota returns
yourself. Ask your local software Use the right postage
Direct deposit =
retailer about the available software Insufficient postage means the U.S.
Postal Service will send your return
faster refunds!
programs offering IRS’s Federal/State
back to you.
E-file program. Make sure the program
If you use Form ND-1 and have a
supports North Dakota tax forms. Sign the return
refund coming, you may request that Each year we receive thousands of
3. Internet on-line service
your refund be deposited directly into unsigned returns. Before we can
Go to the Internet and check out the
your bank account. This option gets process them, we must return them to
on-line filing services that offer the
your refund to you in a more secure and taxpayers for their signatures.
IRS’s Federal/State E-file program. For
fast manner. For information on how Include a copy of your
links to the available services, go to our
to direct deposit your refund, see the federal return
web site at: www.nd.gov/tax. Click on
instructions to line 32 of Form ND-1 on A copy of the federal return is part of a
Individual Income, then Electronic
page 15. complete state return. If it’s missing,
Filing in the drop-down list. we cannot process the return, and it
will be sent back to you.

6. North Dakota
4
2008 Form ND-1 instructions
General and specific line instructions for Form ND-1
General Shouldn’t I use Form ND-2 if I you always intend to return whenever
have one of the deductions or absent from it. If you have more than
instructions credits on it? one physical place of abode, only one of
Not necessarily. There are a number them may be your legal residence. Legal
This section provides information on
of special deductions, exclusions, and residence is based on your intent and
selecting the right form, filing
credits that may be claimed only if your actions.
requirements, procedures for obtaining
Form ND-2 is used. As a general rule,
an extension, estimated tax requirements,
Statutory 7-month rule—Even though
they are usually not enough to offset
correcting a return, and other general
you were not a resident of North Dakota
the higher tax rates on Form ND-2.
information.
for any part of the tax year—that is,
Some taxpayers will benefit from using
you were a full-year nonresident—you
Form ND-2, but they make up less than
must file as a full-year resident of North
2 percent of all individual filers in North
Which form to use Dakota if you maintain a permanent place
Dakota. If in doubt as to which form to
of abode in North Dakota and spend in
use, use Form ND-1. If you find later
North Dakota income tax law provides
the aggregate more than 210 days of the
that your tax would have been lower on
for two methods of calculating the
tax year in North Dakota. A permanent
Form ND-2, you have the option of filing
individual income tax. The two methods
place of abode means a house, apartment,
an amended return (within the statutorily
are implemented on two different
or other dwelling containing cooking
prescribed time periods) to change forms.
forms—Form ND-1 and Form ND-2.
and bathroom facilities that is suitable
(This booklet contains only Form ND-1
for year-round living and is maintained
and its instructions.)
on a permanent or indefinite basis. This
Who must file 7-month rule does not apply if you were
Your choice of forms will affect
(1) a part-year resident of North Dakota,
the amount of your tax!
Property tax relief—Even though you (2) a full-year nonresident serving in
The two forms (and their respective
do not have to file a 2008 North Dakota the U.S. armed forces, or (3) a full-
calculation methods) are governed by
income tax return, you may be eligible year resident of Montana or Minnesota
different provisions of North Dakota
for property tax relief. Obtain the 2008 covered by reciprocity.
income tax law. Because the calculation
Form ND-3 for more information.
method and tax rates are different
Residents in U.S. armed forces—If you
under each method, you will calculate
were a resident of North Dakota serving
a different tax under each one. For the Full-year resident
in the U.S. armed forces in 2008 and
majority of individuals, the tax will be If you were a full-year resident of North
you are required to file a 2008 federal
the lowest on Form ND-1. Dakota for the 2008 tax year and you are
individual income tax return, you must
required to file a 2008 federal individual
file a 2008 North Dakota individual
So, which form should I use? income tax return, you must file a 2008
income tax return as a full-year resident.
Generally, you should use Form ND-1. North Dakota individual income tax
This applies regardless of where you
Over 98 percent of all filers will calculate return. This applies even though you
were stationed during 2008.
a lower tax on Form ND-1 than on Form may have worked outside North Dakota
ND-2. If you used Form ND-2 last year, (including employment overseas) during
do not automatically use Form ND-2 for Full-year nonresident
the tax year, or you have other income
this year, but check out Form ND-1 to from sources outside North Dakota. You If you were a full-year nonresident of
make sure you are paying the lowest tax. were a full-year resident of North Dakota North Dakota for the 2008 tax year, you
if you were a resident of North Dakota must file a 2008 North Dakota individual
Who should use Form ND-2?
for the entire tax year, or you meet the income tax return if both of the following
Very few individuals will benefit from
statutory 7-month rule. apply:
using Form ND-2. Form ND-2 should be
• You are required to file a 2008 federal
used only if it produces a tax that is lower
Definition of resident—In these individual income tax return.
than the tax calculated on Form ND-1.
instructions, the term “resident” refers to
Although you calculate a North Dakota • You derived gross income from North
an individual who is a legal resident of
taxable income on both forms, do not Dakota sources during the 2008 tax
North Dakota. Legal residence (which
base your choice on this number alone. year. (See the box on page 5 for what
is also called domicile) means the place
You must also consider the tax rates is included in gross income from North
that is your permanent home to which
which are much lower on Form ND-1. Dakota sources.)

7. North Dakota 5
tax because of a treaty. For more
You were a full-year nonresident if you constituted a change in your legal
information, including the instructions
were not a resident of North Dakota for residence. See Definition of resident on
on how to complete the North Dakota
any part of the tax year, and you do not page 4.
return, obtain the Income Tax Guideline:
meet the statutory 7-month rule—see
Taxation of Nonresident Aliens.
page 4.
Native Americans
Nonresidents in U.S. armed forces—If
Part-year resident
you were a full-year nonresident of North If you are a Native American, you are
If you were a part-year resident of North
Dakota serving in the U.S. armed forces not subject to North Dakota income tax
Dakota for the 2008 tax year, you must
in 2008 and your only gross income from and do not have to file a North Dakota
file a 2008 North Dakota individual
North Dakota sources was your military income tax return if all of the following
income tax return if both of the following
compensation, you are not subject to apply:
apply:
North Dakota income tax. You do not
• You are enrolled as a member of a
• You are required to file a 2008 federal
have to file a North Dakota income tax
federally-recognized Indian tribe.
individual income tax return.
return unless you are married and are
• You lived on any Indian reservation in
filing a joint federal income tax return, • You derived gross income from any
North Dakota.
and your spouse is required to file a source inside or outside North Dakota
North Dakota income tax return. • You derived all of your income from
while you were a resident of North
sources on any Indian reservation in
Dakota, or you derived gross income
Minnesota or Montana resident—If North Dakota.
from North Dakota sources while you
you were a Minnesota resident in 2008, were a nonresident of North Dakota.
If any of the above criteria are not met,
you do not have to file a North Dakota (See the box on this page for what is
you may be subject to North Dakota
individual income tax return if both of included in gross income from North
income tax. For more information,
the following apply: Dakota sources while a nonresident.)
obtain the Income Tax Guideline: Income
• Your only gross income from North Taxation of Native Americans.
You were a part-year resident of North
Dakota sources was compensation for Dakota if you were a resident of North
personal or professional services. Dakota for only part of the year. This
• You returned to your home in generally applies if you moved into
Minnesota at least once each month or out of North Dakota and the move
during the time you worked in North
Dakota.
Gross income from North Dakota sources
If you are a Montana resident, you do not (for nonresidents only)
have to file a North Dakota individual
income tax return if your only gross
Exceptions
Gross income from North Dakota sources
income from North Dakota sources was
includes the following items received Gross income from North Dakota sources
wages.
while a nonresident of North Dakota: does not include these items received
while a nonresident of North Dakota:
See Reciprocity on page 6 for more • Compensation for services performed
military pay, interest, dividends, pensions,
information. in North Dakota, such as wages,
annuities, gain from the sale or exchange
salaries, tips, commissions, and fees.
of intangible property, compensation
Nonresident alien—If you were a • Income from tangible property in North exempted under reciprocity with
nonresident alien of the United States Dakota, such as rents, royalties, and Minnesota or Montana, or compensation
and you received gross income from gain from the sale or exchange of the for services performed in North Dakota
North Dakota sources during 2008, you property. by an individual who performs regularly
must file a 2008 North Dakota individual
• Income from a sole proprietorship, assigned duties in more than one state
income tax return. Except where an
partnership, S corporation, or other for an interstate motor, rail, air, or water
income tax treaty between the United
trade or business carried on in North carrier company, as provided under federal
States and a foreign country specifically
Dakota. interstate commerce law.
exempts income from taxation by a U.S.
• Income from an estate or trust, but only
state, income tax treaties between the Note: Interest, dividends, gains, and other
to the extent the income is derived from
U.S. and foreign countries do not apply income from intangible property
tangible property or a trade or business
for North Dakota income tax purposes. are included in gross income from
in North Dakota.
Therefore, you may have to pay North North Dakota sources if derived from
• Income from gambling activity carried
Dakota income tax on income derived a sole proprietorship, partnership, or
on in North Dakota.
from North Dakota sources even though S corporation doing business in North
the income is exempt from U.S. income Dakota.

8. North Dakota
6
following the close of your fiscal tax
5. File Form ND-1 with a copy of your
Reciprocity year. If the due date falls on a Saturday,
federal return and Form W-2s showing
Sunday or holiday, you have until the
North Dakota income tax withholding.
North Dakota has income tax reciprocity next day that is not a Saturday, Sunday,
agreements with the states of Minnesota or holiday to file your return.
If your wages are covered by reciprocity
and Montana. If certain conditions in the and you do not want your employer to
agreements are met, a resident of North Mail your return in the preaddressed
withhold North Dakota income tax from
Dakota does not have to pay Minnesota envelope provided in this booklet. If you
them, you must complete Form NDW-R
or Montana income tax on compensation don’t have a preaddressed envelope, mail
and give it to your employer. Ask your
received for work performed in the it to:
employer for this form.
other state, and a resident of Minnesota
Office of State Tax Commissioner
or Montana does not have to pay North North Dakota residents PO Box 5621
Dakota income tax on compensation If you are a resident of North Dakota and Bismarck, North Dakota 58506-5621
received for work performed in North you maintain a permanent home in North
Dakota. Dakota to which you return at least once
each month during the time you work
Extension of time to file
Minnesota and Montana in Minnesota, the compensation that
residents you receive for personal or professional You may obtain an extension of time to
If you are a resident of Minnesota and services performed in Minnesota is not file your North Dakota individual income
you maintain a permanent home in taxable by Minnesota. Also, wages you tax return by obtaining either a federal
Minnesota to which you return at least receive for work performed in Montana extension or a North Dakota extension.
once each month during the time you while a resident of North Dakota are not
work in North Dakota, the compensation taxable by Montana.
you receive for personal or professional Federal extension
services performed in North Dakota is If you obtain an extension of time to file
If you received wages covered by
not taxable by North Dakota. your federal return, it will be recognized
reciprocity and your employer withheld
for North Dakota purposes. This
Minnesota or Montana income tax from
If you are a resident of Montana, wages includes the automatic extension allowed
them, you must file an income tax return
you receive for work performed in North for being outside the U.S. and Puerto
with Minnesota or Montana to obtain a
Dakota are not taxable by North Dakota. Rico on April 15. You do not have to file
refund of the amount withheld. If your
a separate state extension form, nor do
wages are covered by reciprocity and you
If you received wages covered by you have to notify the Office of State Tax
do not want your employer to withhold
reciprocity, and your employer withheld Commissioner that you have obtained
Minnesota or Montana tax from them,
North Dakota income tax from them, a federal extension prior to filing your
you must give your employer a properly
you must file a North Dakota individual North Dakota return. Fill in the circle
completed Minnesota Form MW-R or
income tax return at the end of the tax next to “Extension” at the top of page 1
Montana Form NR-2, whichever applies.
year to obtain a refund of the amount of Form ND-1.
For assistance and forms, contact:
withheld. If this applies to you and you
• Minnesota Revenue
do not have any other gross income from
Mail Station 5510 North Dakota extension
North Dakota sources, obtain Form ND-1
St. Paul, MN 55146-5510 If you do not obtain a federal extension,
and complete it as follows:
Phone: (651) 296-3781 but need additional time to file your
1. Complete the applicable items at Web: www.taxes.state.mn.us North Dakota return, you may apply
the top of Form ND-1, page 1 (up to
for a North Dakota extension by
• Montana Department of Revenue
line D), as instructed.
completing and filing Form 101. This
PO Box 5805
2. Fill in the circle for “MN/MT is not an automatic extension—you
Helena, MT 59604-5805
RECIPROCITY” at the top of must have good cause to request a North
Phone: (406) 444-6900
Form ND-1, page 1. Also enter “MN” Dakota extension. Form 101 must be
Web: www.mt.gov/revenue
or “MT”, whichever applies, on the postmarked on or before the due date of
line next to the circle. your return. You will be notified whether
your extension request is approved or
3. Leave line D and lines 1 through 25 Changed for 2008!
rejected. If approved, fill in the circle
blank.
When and where to file next to “Extension” at the top of page 1
4. Fill in the amount of the North Dakota If you are filing on a calendar year basis, of Form ND-1.
income tax withheld on lines 26, 28, you must file your 2008 North Dakota
29, and 32. individual income tax return on or before
April 15, 2009. If you are filing on a
fiscal year basis, you must file on or
before the 15th day of the fourth month

9. North Dakota 7
(or fraction of a month) during which the
Extension interest How to prepare an amended
return remains delinquent, not to exceed
If you obtain an extension and file your return
25% of the tax due, must be paid.
North Dakota return on or before the 1. Obtain a blank North Dakota
In addition to any penalty, interest must
extended due date, and you pay any tax individual income tax return for the
be paid at the rate of 1% per month
balance due with the return, no penalty tax year affected by the changes.
(or fraction of a month), except for the
will be charged. Interest on any tax due
month in which the tax was due, on any 2. Enter your name, current address,
on the return will be charged at the rate
tax due that remains unpaid after the due social security number, and other
of 12% per year from the original due
date (or extended due date) of the return. information required in the top portion
date of your return to the earlier of the
of the return.
date you file your return or the extended
due date. 3. Fill in the applicable circle next to
“Amended” in the top right-hand
Copy of federal return
corner of the return.
Prepayment of tax due You must attach a complete copy of 4. Using the revised information,
If you are applying for an extension your 2008 federal income tax return to complete the return through the net tax
of time to file, you may prepay the tax your North Dakota return. A complete liability line.
that you expect to owe to avoid paying copy consists of Form 1040EZ, 1040A,
extension interest. To do so, submit 5. Leave the line for income tax
or 1040 along with any supplemental
your check or money order along with withholding blank unless you are
forms and schedules. You do not have
a completed 2008 Form 400-EXT on claiming an additional amount not
to include depreciation schedules or
or before the due date of your return previously claimed.
any other statements that you may have
(excluding extensions). Alternatively, prepared as supporting documentation. 6. On the “Total payments” line (line 28),
you may submit your payment along with enter the net tax liability shown on
a letter containing the following: your original return or previously filed
• Your name. amended return.
Changing your return
• Your social security number. 7. Complete the remaining portion of the
If you need to change your North Dakota
• Your address and phone number. return according to the instructions.
return after you file it, you must file an
• Statement that you are making a 2008 On an amended return, you may not
amended return. There is no special form
Form 400-EXT payment. adjust the amount of any voluntary
for this purpose. See How to prepare contribution to the wildlife or
an amended return later on this page. trees funds, nor the amount of an
overpayment applied to the next year’s
If you paid too much tax because of an
Penalty and interest estimated tax.
error in your return, you generally have
The full amount of your tax due must be three years after you file your original 8. Attach a statement explaining why
paid by the due date (without extension) return to file an amended return to you are changing your return. If you
of your return to avoid penalty and correct the error and claim a refund of are doing so because of changes you
interest charges. However, if you the overpayment. There are other time or the IRS made to your federal return,
obtained an extension of time to file periods that may apply, such as in the attach a copy of the amended federal
your return, you may pay the tax due case of a net operating loss carryback, an return or IRS notice.
by the extended due date of the return overstatement of tax of over 25%, or an
without penalty, but extension interest IRS audit. For more information, contact
will apply—see Extension interest and the Office of State Tax Commissioner.
Estimated tax
Prepayment of tax due on this page.
Penalty and interest apply to additional requirement (for 2009)
If you file your return on or before its tax due on an amended return.
You must pay estimated North Dakota
due date (or extended due date), but you
income tax for the 2009 tax year if all of
pay your tax due after the due date (or
Change to federal return the following conditions apply:
extended due date), a penalty equal to
By law, you must file an amended North
5% of the tax due or $5.00, whichever is
1. You are required to pay estimated
Dakota return to report changes made to
greater, must be paid.
federal income tax for 2009.
your federal return. This applies whether
If you do not file your return on or the changes are attributable to your filing 2. Your net tax liability for 2008 is $500
before its due date (or extended due of an amended federal return, or an audit or more. (If you are not required to
date), a penalty equal to 5% of the tax or correction by the IRS. The amended file a North Dakota return for 2008,
due or $5.00, whichever is greater, for North Dakota return must be filed within you do not have to pay estimated tax
the month the return was due plus 5% 90 days after filing the amended federal for 2009.)
of the tax due for each additional month return or within 90 days after the final
determination of the IRS changes.

10. North Dakota
8
appointed for the decedent, contact the
3. You expect to owe (after subtracting
Specific instructions
Individual Income Tax Section, Office of
any estimated North Dakota income
State Tax Commissioner for assistance
tax withholding) at least $500 in tax for top of page 1,
(see the back cover of this booklet). Fill
for 2009.
Form ND-1
in the circle for “Deceased” next to the
4. You expect your North Dakota income
deceased taxpayer’s name at the top of
tax withholding for 2009 to be less
Form ND-1.
than the smaller of the following: Fiscal year filer only
If you used a fiscal tax year for federal
(a) 90% of your 2009 net tax liability.
income tax purposes, enter in the spaces
(b) 100% of your 2008 net tax
General instructions for provided the ending date of your fiscal
liability. If you moved into North
completing Form ND-1 tax year as shown on your federal return.
Dakota during 2008 and had no
income from North Dakota prior
to the move, this 100% threshold Name and address
Before you begin . . . .
does not apply; you must satisfy Enter your full name and address in the
the 90% threshold in part (a). Be sure to have a copy of your completed spaces provided on the return. If you are
2008 federal income tax return at hand. married and filing a joint return, include
In general, one-fourth (25%) of the total
You will need information from it to your spouse’s full name.
estimated tax required to be paid for the
complete Form ND-1.
2009 tax year must be paid by April 15,
If the taxpayer died during the 2008 tax
June 15, and September 15, 2009, and
year, fill in the circle for “Deceased” next
January 15, 2010. Rounding of numbers
to the taxpayer’s name.
You may enter your numbers on the
If you are required to pay estimated tax
return in dollars and cents, or you may
for 2009, obtain the 2009 Form 400-ES,
Social security numbers
round your numbers to the nearest whole
Estimated income tax—individuals.
dollar. If you choose to round your Enter your social security number (and
numbers, drop the cents if less than 50 your spouse’s social security number, if
cents and round up to the next whole married ) in the spaces provided on the
How to file a return for a dollar amount if 50 cents or higher. For return.
deceased taxpayer example, $25.36 becomes $25.00, and
$25.50 becomes $26.00.
If a final federal income tax return is Item A - Filing status
required to be filed for a decedent for Fill in the circle next to the filing status
Part-year resident or full-year
the year of death, a final North Dakota that you used on your federal individual
nonresident of North Dakota
income tax return must also be filed. A income tax return.
court-appointed personal representative If you were a nonresident of North
is responsible for filing the decedent’s Dakota for part or all of the tax
Item B - School district code
final return, even if there is a surviving year, you must complete and attach
Select the code number from the list on
spouse. The information from the final Schedule ND-1NR to Form ND-1.
page 19 for the school district in which
federal return is used to complete the On Schedule ND-1NR, you will
you resided for most of the tax year and
final North Dakota return, and the North indicate whether you were a full-year
enter it in the spaces provided on the
Dakota return is to be signed in the same nonresident or a part-year resident by
return.
manner as required for federal income filling in your residency information at
tax purposes. If there is a personal the top of the schedule.
representative and no surviving spouse, Item C - Income source code
a copy of the court document showing If you are married and filing a joint Select the code number corresponding
the appointment must be attached to the return, and either you or your spouse to the area from which you derived the
final return. If there is a surviving spouse was a nonresident of North Dakota for majority of your income for the tax year.
and the final return will be filed on a joint part or all of the tax year, you must
Source Code
basis, a refund will be mailed in both complete Schedule ND-1NR on a joint
of income number
spouses’ names. basis and attach it to Form ND-1. On Farming, ranching, or
Schedule ND-1NR, each of you must agricultural production .................. 1
If the surviving spouse experiences any indicate your residency status by filling Retail, wholesale trade, and
problem with depositing or cashing the in your residency information at the top eating and drinking places ............. 2
check, or if there is no surviving spouse of the schedule. Federal, state, county, or city
and no personal representative has been government service ...................... 3
Public or private education ................ 4

11. North Dakota 9
this return solely to claim a refund of must enter on this line the amount of the
Accounting, legal, health, motel, and
other personal or professional North Dakota income tax because of contribution on which the tax credit was
services not classified elsewhere ..... 5 reciprocity. See page 6 for details. based that you deducted in calculating
Construction ................................... 6 your federal taxable income for 2008.
Manufacturing ................................. 7 This adjustment also must be made for a
Transportation, communication, and charitable contribution deduction passed
Specific instructions
public utilities............................... 8
through to you by a passthrough entity
for lines 1 through 37,
Exploration, development, and on which the entity calculated the North
extraction of coal, oil, and
Form ND-1 Dakota endowment fund tax credit,
natural gas .................................. 9
limited to the portion of the contribution
Banking, insurance, real estate, and
deducted on your federal income tax
other financial services ................ 10
return.
Line 1 - Federal taxable
Military service .............................. 11
income
Retirement
If your federal taxable income is a Line 6 - U.S. obligation
(Pensions, annuities, IRAs, etc.) .... 12
negative number (that is, it is less than interest
zero mathematically), you are instructed Enter the following on this line:
Amended return to enter zero on your federal income
• Interest income from U.S. obligations.
If you are filing this return for the tax return. However, for purposes
• Interest income from other securities
purpose of changing a return you of completing Form ND-1, enter the
that is specifically exempted from state
previously filed for the 2008 tax year, fill negative number on line 1. Enter a minus
income tax by federal statute.
in the circle next to one of the following: sign (-) to the left of the number.
• The portion of dividend income from a
• General..... if you are changing the
mutual fund attributable to investment
Line 2 - Lump-sum
return for any reason except
in U.S. obligations and other securities
a federal net operating loss distribution
the interest from which is exempted
carryback. If you received a lump-sum distribution
from state income tax by federal
from a qualified retirement plan that you
• Federal
statute.
elected to report on Federal Form 4972
NOL ......... if you are changing
(Tax On Lump-Sum Distributions), you
the return because of a Common sources of interest income that
must enter on this line the amount from
federal net operating loss may be entered on this line include:
Form 4972, line 6 plus line 10. However,
carryback. • U.S. savings bonds and Treasury bills
if you received the distribution while and notes.
See Changing your return on page 7 for a nonresident of North Dakota, do not
more information. • Securities issued by:
make an entry on this line.
Banks for cooperatives
Commodity Credit Corporation
Extension Line 3 - Loss from financial Federal Deposit Insurance
Fill in the circle next to “Extension”
institution Corporation
only if you have an extension to file your
Enter on this line the amount of a Federal Farm Credit System
North Dakota return. See Extension
loss reported to you by a partnership, Federal Home Loan Banks
of time to file on page 6 for more
S corporation, or other passthrough Federal Intermediate Credit Banks
information.
entity that is subject to North Dakota’s Federal Land Banks
financial institution tax under N.D.C.C. Federal Savings & Loan Insurance
ch. 57-35.3. For more information,
Federal estimated tax Corporations
obtain the Income Tax Guideline:
requirement Student Loan Marketing Association
Adjustment For Income (Loss) From A
If you were required to pay estimated
Do not enter on this line interest income
Passthrough Entity Subject To N.D.C.C.
federal income tax for any part of the
from securities of the Federal Home Loan
ch. 57-35.3.
2008 tax year, you must fill in the circle
Mortgage Corporation (Freddie Mac),
next to “Yes.” This applies whether
Federal National Mortgage Association
or not you actually made the required
(Fannie Mae), and Government National
Changed for 2008!
payment. Otherwise, fill in the circle
Mortgage Association (Ginnie Mae),
next to “No.” Line 4 - Planned gift nor from a federal income tax refund or
or endowment credit repurchase agreement.
adjustment
MN/MT reciprocity
If you claimed the planned gift tax
Fill in the circle next to “MN/MT
credit on Schedule PG in 2006 or 2007,
Reciprocity” only if you are a Minnesota
or are going to claim it for 2008, you
or Montana resident who is filing