North Dakota income tax goes up to 2.5% at the top bracket. Calculate your combined federal + state effective tax rate for 2026. Formula shown, sources cited — no account required.
North Dakota's graduated income tax tops out at just 2.5%, making it one of the friendliest income tax environments in the country. The bracket structure starts at a very low rate for modest incomes and climbs gradually, but the top rate is so low that even high earners face a minimal state burden. The median household at $77,871 likely pays an effective state rate closer to 1.5% after standard deductions. At the federal level, the same earner probably falls into the 22% marginal bracket, making federal tax the dominant piece of the overall burden. North Dakota partially exempts Social Security from state taxation for lower-income retirees, which benefits those on fixed incomes. There are no particularly unusual deductions or credits at the state level, but the low rates mean complex planning is rarely necessary for median earners. The tax bracket calculator helps you see your combined state and federal effective rate and understand where your marginal dollar goes.
North Dakota Tax Brackets Explained: Low State Rate Keeps Bills Down (2026)
North Dakota has a state income tax with a top marginal rate of 2.5%. On top of federal rates (10%–37%), residents can face a combined marginal rate exceeding 35% at higher income levels. However, your effective rate is always lower than the marginal rate because only income above each threshold is taxed at that bracket's rate.
The median household in North Dakota earns $77,871/year. At that income (single filer), the federal effective rate is approximately 12–14%, bringing total income tax (federal + state) to roughly 14–16%.
How Marginal vs. Effective Rate Works
The marginal rate is the rate on your last dollar of income — it does not apply to all income. The effective rate is your total tax divided by total income. For example, someone earning $100,000 in North Dakota has a 22% federal marginal rate but an effective federal rate of roughly 15%, because the first $44,725 (2024) is taxed at 10% and 12%, not 22%.