I am a nonresident deriving income from North Dakota. Am I exempt from North Dakota income tax under a reciprocal agreement?
Reciprocal refers to an agreement between two states where the residents of one state performing services in another state are not subject to tax in the state where they work, but rather only in the state where they live. Reciprocal agreements typically occur between neighboring states, because of the frequency of people in cities along the borders crossing over and working in the other state. Such agreements only occur if both states’ taxing authorities and governors agree to them. The basis for a reciprocal agreement is to help simplify the tax reporting of individuals between two states when the income is being taxed by the individual’s state of residence. North Dakota has a reciprocal agreement with two states: Minnesota and Montana. A resident of any other state who performs services in North Dakota, or receives income from North Dakota sources is subject to North Dakota income tax.
Related Questions
- I am a nonresident of North Dakota and I own land in North Dakota from which I receive both cash rent and oil royalty income. Am I required to file a North Dakota income tax return?
- I am a nonresident deriving income from North Dakota. Am I exempt from North Dakota income tax under a reciprocal agreement?
- What Is The Nonresident Reciprocal Agreement?
