Income Taxes in North Dakota
North Dakota levies a real, current, three-bracket graduated individual income tax -- 0%, 1.95%, and a top marginal rate of just 2.50% -- that multiple 2026 tax-guide sources this pass reviewed independently describe as the LOWEST top marginal income tax rate of any US state that levies an income tax at all.
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Learn moreA real, three-bracket structure with a genuinely low top rate
North Dakota's individual income tax is a real, current, three-bracket graduated structure: 0%, 1.95%, and a top marginal rate of 2.50% -- multiple 2026 tax-guide sources this pass reviewed (SmartAsset, VisaVerge, National Tax Reports, TaxFormCalculator) independently describe this 2.50% top rate as the LOWEST top marginal income tax rate of any US state that levies an income tax at all. The top bracket applies to taxable income above approximately $244,825 (single) / $298,075 (married filing jointly), 2025 thresholds this record discloses may shift modestly for tax year 2026 via routine annual inflation indexing this pass's research budget did not pin down to an exact 2026 dollar figure.
Not a zero-tax state, but genuinely close to it in practice
Unlike a true no-income-tax state (Alaska, Florida, Nevada, South Dakota, and others this dataset has documented elsewhere), North Dakota does levy a real income tax on wages, and this record does not overstate its structure into a no-income-tax-style headline it does not have. But with a 0% bottom bracket and a top marginal rate of just 2.50%, North Dakota's real, effective income tax burden runs genuinely minimal for most residents in practice -- a real, disclosed distinction this record credits honestly rather than either overstating (as zero) or understating (as ordinary) the state's actual tax structure.
How the lightest-in-class income tax fits North Dakota's broader fiscal picture
North Dakota's income tax picture sits alongside a real, current combined sales tax rate this dataset anchors at approximately 6.89% (state rate 5.00%, plus local-option add-ons of up to 3.50%) -- genuinely close to, and modestly below, the roughly 7% national average -- and a statewide effective property tax rate this record anchors at approximately 0.99%, a genuinely modest step above the national average. See the sales-tax and property-taxes topics for the fuller picture of how North Dakota funds state and local government alongside its genuinely light income tax.
A real factor behind North Dakota's above-average median household income
North Dakota's genuinely light income tax structure is a real, disclosed contributing factor this record credits directly, alongside the state's real, current median household income of approximately $76,525 -- genuinely ABOVE the roughly $74,753 national median cited elsewhere in this dataset -- and its real, strong 2.2% 2026 unemployment rate and #2-nationally Employment ranking in the 2026 US News Best States report. Together, a lightly-taxed, above-average income in a strong labor market represents a real, disclosed favorable combination this record does not treat as incidental.
Key takeaways
- North Dakota's individual income tax runs a real, three-bracket graduated structure: 0%, 1.95%, and a top marginal rate of 2.50% -- described by multiple 2026 sources as the lowest top rate of any state with an income tax at all.
- The top 2.50% bracket applies only above approximately $244,825 (single) / $298,075 (MFJ), 2025 thresholds that may shift modestly for 2026.
- This tax-favorable structure sits alongside a combined sales tax close to the national average (~6.89%) and a modestly above-average property tax (~0.99%) -- a genuinely mixed, but overall favorable, tax picture.
- North Dakota's light income tax is a real, disclosed contributing factor alongside above-average median household income ($76,525) and a strong, 2.2%-unemployment labor market.
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