North Dakota Withholding laws & HR compliance analysis

North Dakota Withholding: What you need to know

An employer is required to withhold North Dakota income tax from wages paid to an employee if the employee performs services within North Dakota and if the wages are subject to federal income tax withholding. Wages that are not subject to federal income tax withholding, such as wages paid for domestic labor, are not subject to North Dakota income tax withholding. If an employer and employee mutually agree to withhold federal income tax from wages that are not subject to federal income tax withholding, the wages are not subject to North Dakota income tax withholding. Changes to the Internal Revenue Code are automatically adopted by North Dakota.
If an employer’s main place of business is located in North Dakota, the employer must withhold North Dakota income tax from wages paid to a resident employee who performs services in another state. However, this does not apply if the employer is required by the other state to withhold that state’s income tax from the wages. Withholding is not required on wages paid to residents of Minnesota and Montana who file form NDW-R, Affidavit of Residency, by February 28 of each year. (Minnesota residents also must return there at least once a month.)
Wages paid to a nonresident alien of the United States for services performed within North Dakota are subject to North Dakota income tax withholding if they are subject to federal income tax withholding. If wages paid to a nonresident alien are exempt from federal income tax withholding because of an income tax treaty between the United States and a foreign country, they are not exempt from North Dakota income tax withholding. Except where an income tax treaty between the United States and a foreign country specifically exempts ...

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