North Dakota Form ND-1 Line by Line Guide
Did you know 9 states do not require residents to pay a personal income tax? Folks that live in Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming, are exempt from this bill. Furthermore, 7 other states simply enforce a flat tax rate. So what’s the moral to the story? People who live in these states are able to buy more stuff because they pay less tax.
But for the rest of us, residential income tax is a necessary evil, one that takes a serious bite out of our disposable income. And while the forms are designed to collect the same data, they’re all constructed differently. What follows is a breakdown of Form ND-1, the North Dakota Individual Income Tax Return. If you don’t live in North Dakota, not to worry, we’ll be tackling the other 34 states soon enough.
No bells, no whistles, no bs, best describes North Dakota’s ND-1. It’s to the point, simple, and only 39 lines on 2 measly pages. You even get a spot to record your direct deposit information and one mailing address regardless of whether you owe or are due a refund. Yep, this is how it’s supposed to be and we’re going to give it an 8 of 10 on our user-friendly meter. It doesn’t get much easier than this anywhere in the country.
Begin by filling in your name, address, Social Security number, and filing status at the top of the form. Just be sure to fill in your school district and income source codes before continuing. Knock out this section by inputting your federal adjusted gross income on Line D.
On Line 1 enter your federal taxable income; you can find this on line 43 of your 1040 Form, Line 27 of your 1040A, or Line 6 of your 1040EZ. If you received a lump sum distribution, record that amount on Line 2. If you incurred a loss from a pass-through entity (will only apply if you’re part of a partnership, a shareholder in an S corporation, or a beneficiary of a trust), jot down that amount on Line 3.
If you received a planned gift or a tax credit endowment, record that amount on Line 4. Now add Lines 2 through 4 on Line 5 to get your total additions. Next add Line 1 to Line 5 on Line 6 to get your taxable income plus any additions.
If we must work through the additions section, then we also get to work out some subtractions. Start on Line 7 with interest from US bonds. On Line 8 record any long-term capital gain exclusions. And on Line 9 any exempt income for Native Americans. If you’ve worked on the railroad, pay attention to Line 10, and if you received income from a pass-through entity (You remember what that is, right?) record that amount on Line 11.
If you’re part of the National Guard, you’re due an active-duty pay exclusion on Line 12. Just attach a copy of your title 20 orders if this applies. Nonresidents need to work through Line 13, while full timers can skip it. Just be sure to record your College SAVE account deduction on Line 14. North Dakota has a fairly new law that excludes qualified dividends; just make sure that amount goes on Line 15 before figuring any other subtractions on Line 16.
Add Lines 7 through 16 on Line 17 to get your total subtractions. Next subtract Line 17 from Line 6 to reveal your North Dakota taxable income, just put that amount on Line 18 on page 1 and Line 19 on page 2.
Full-year residents need to look up the tax table on page 20 of the instruction booklet to figure their tax, which goes on Line 20. Just know that if you’ve earned a farm income, you can find the amount of that tax on page 13. Would you believe we only have the credit section left and we’re done?
Line 21 provides for a credit on taxes you’ve paid to other states, while Line 22 is for your marriage penalty credit. I’m pretty sure the North Dakota Tax Commissioner is divorced. Lines 23 and 24 are a carryover of unused residential and commercial property tax credits, while Line 25 is looking for any other credits that haven’t been mentioned.
Now you get to add Lines 21 through 25 to get your total credits, which you then subtract from Line 20 to get your net tax liability. Feel free to record this liability on Line 27 before you move on.
Record your North Dakota withholdings on Line 28. You get this amount from your W-2 or 1099. If you paid an estimated tax, record that amount on Line 29. Now add Lines 28 and 29 to yield you total payments, which go on Line 30.
If Line 30 is more than Line 27, subtract the difference and put the balance on Line 31. This works out to be your overpayment. If you want a portion of this to be applied to next year, record the amount on Line 32. If you’re feeling generous, feel free to give to a couple of good causes on Line 33. Now subtract Lines 32 and 33 from Line 31 to get your refund, which goes on Line 34. Just be sure to record your banking information for direct deposit purposes.
But, if Line 30 is less than Line 27, subtract that difference and put the amount on Line 35. This is your remaining tax liability. If interest or penalties apply, fill in those amounts on Line 36. If you feel like giving more than your liability, donate an amount you’re comfortable with on Line 37. Now add Lines 35 through 37 to yield your total balance that’s still due on Line 38.
All that’s left is to sign, date, and record your cell number at the bottom of the form. If you had a tax pro help you, they will do the same. I applaud the form makers in North Dakota; the ND-1 is no-nonsense. If you can get past some confusing language, like pass-through entities and marriage penalty credits, this thing is a snap to complete. And that allows you North Dakota folk the free time to do whatever it is that you do.
