Mostly taxed
How North Dakota taxes retirement income
North Dakota does not tax Social Security at any income level; the earlier income limit on the exclusion was removed starting in 2021. Military retirement pay, including National Guard and Reserve retirement, is fully excluded.
Pensions and retirement savings are taxed, including NDPERS and TFFR teacher pensions, company pensions and withdrawals from 401(k), 403(b), 457(b) and IRA accounts. The tax is light, though. Since 2024, North Dakota has taxed most income at 1.95% to 2.5%, and the first $48,000 or so of taxable income for single filers is taxed at zero.
For a typical retiree with a moderate pension, the state bill is small. North Dakota also offers a homestead property tax credit for homeowners 65 and older with limited income.
Questions
Does North Dakota tax Social Security?
No. Social Security is fully exempt regardless of income.
Does North Dakota tax TFFR teacher pensions?
Yes, though rates top out at 2.5% and lower incomes are taxed at zero.
Is military retirement taxed?
No. Military retirement pay is fully excluded.