North Dakota Credit for Income Tax Paid to Another State

Credit for Income Tax Paid to Another State
Schedule ND-1 CR - Credit For Income Tax Paid To Another State Or Local Jurisdiction (2023)
CREDIT FOR INCOME TAX PAID TO ANOTHER
STATE OR LOCAL JURISDICTION
OFFICE OF STATE TAX COMMISSIONER

Schedule ND-1CR

2023

SFN 28721 (12-2023)

Name (First, MI, Last Name)

Social Security Number

Full-year resident and part-year resident
All taxpayers: All taxpayers must enter the name of the other state in which state and/or local income tax was
paid and complete lines 1a through 6.
Part-year resident: If you were a part-year resident, this credit is allowed only if you reported income to North
Dakota on Schedule ND-1NR, line 18, that (1) has its source in another state and (2) was received or earned
while you were a resident of North Dakota.
Enter the name of the other state in which you paid state and/or local income tax on income
that is also taxed by North Dakota
1. a. Federal adjusted gross income from Form ND-1, line 1a
b. How much of the amount on line 1a has its source in the other state? If none, stop here;
you are not eligible for this credit. See instructions for proper amount to enter here
c. How much of the amount on line 1b did you (and your spouse, if filing jointly) receive or
earn while a resident of North Dakota? If none, stop here; you are not eligible for this
credit. See instructions for proper amount to enter here
2. Enter the applicable amount for your residency status as instructed below

1a

1b

(S8) 1c
(SJ) 2

Full-year resident - Enter the amount from Form ND-1, line 1a, less the amount from Form ND-1,
line 5. (If married filing jointly, this applies only if both spouses were full-year residents.)
Part-year resident - Enter the amount from Schedule ND-1NR, line 18. (If married filing jointly,
this applies if either spouse was a part-year resident.)
3. Divide line 1c by line 2. Round to nearest four decimal places. If line 1c is equal to or more
than line 2, enter 1
4. Enter the amount of your North Dakota tax from Form ND-1, line 19
5. Multiply line 4 by line 3
6. Enter the amount of income tax paid to the other state and its local jurisdictions.
See instructions for proper amount to enter here

3
4
(SL) 5

(SM) 6

If you were a full-year resident, go to line 7. (If married filing jointly, this applies if both spouses
were full-year residents.)
If you were a part-year resident, skip line 7 and go to line 8. (If married filing jointly, this applies
if either spouse was a part-year resident.)

Full-year resident only - Complete line 7 only if you were a full-year resident. (If
married filing jointly, this applies only if both spouses were full-year residents.)
7. Credit - Enter the smaller of line 5 or line 6. Enter this amount on Form ND-1, line 21

7

Part-year resident - Complete lines 8 through 11 only if you were a part-year
resident. (If married filing jointly, this applies if either spouse was a part-year resident.)
8. Enter the amount from line 1b

(SK) 8

9. Divide line 1c by line 8. Round to nearest four decimal places. If line 1c is equal to or more than
line 8, enter 1
10. Multiply line 6 by line 9
11. Credit - Enter the smaller of line 5 or line 10. Enter this amount on Form ND-1, line 21

9
(S9) 10
11

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SFN 28721 (12-2023), Page 2

General instructions
Who is eligible

You may be eligible for a credit for
income tax paid to another state
or local jurisdiction if both of the
following apply:
	 •	 You were a North Dakota resident
for all or part of the tax year.
	 •	 You paid income tax for the tax
year to North Dakota and to the
other state or local jurisdiction on
the same income. If you were a
part-year resident of North Dakota,
the credit is allowed if the eligible
income was earned or received
during the time you were a North
Dakota resident.
A “state” means any of the
other 49 U.S. states, the District
of Columbia, and a U.S. territory.
A “local jurisdiction” means a city,
township, county, etc., within a state.
Qualifying taxes—The credit is
allowed for income taxes you paid
to another state and any of its local
jurisdictions. The credit is not allowed
for income tax paid to a foreign
country or its local jurisdictions, nor
is it allowed for any tax that is not an
income tax (e.g., property or sales
taxes).
Composite income tax or passthrough entity income tax. If you
owned an interest in a partnership,
S corporation, or a limited liability
company treated like a partnership or
S corporation, you may claim a credit
for your allocable share of an income
tax paid by the pass-through entity to
another state if either of the following
apply:
	 •	 You elected to be included in a
composite income tax return filed
on your behalf in the other state
by the pass-through entity, which
satisfied your personal income tax
filing and payment requirements in
that state.
	

	You do not have to file an
income tax return in the
other state under a law that
imposes the income tax on the
pass-through entity’s income
tax payment satisfies your
requirement to file and pay
income tax on your share of the
pass-through entity’s income.

	

	You filed an individual income
tax return with the other state
on which you were allowed
an income deduction or a tax
credit to offset the other state’s
income tax on your share of the
pass-through entity’s income.

Other jurisdiction’s income tax
return—The credit is allowed only
if you, or a pass-through entity in
the case of a composite or entitylevel income tax, file an income tax
return with the other state or local
jurisdiction. The credit is not allowed
based on income tax withholding
shown on a Form W-2 or estimated
income tax paid to the other state or
local jurisdiction.
Joint filers with different
residency statuses. If you are
filing a joint return and you and
your spouse have different residency
statuses, the credit is available to
either or both of you, if you meet the
eligibility requirements.
Credit for income tax paid
to multiple states or local
jurisdictions—If you paid income
tax to more than one other state for
the tax year, complete a separate
Schedule ND-1CR for each state. If
you also paid income tax to a local
jurisdiction in another state, include
the income tax paid to the local
jurisdiction on the Schedule ND-1CR
completed for the state in which the
local jurisdiction is located. Add the
separate credit amounts from all of
the Schedule ND-1CR forms and enter
the total on Form ND-1, line 21.
Note: If another state assesses you
additional income tax after you file
your North Dakota income tax return,
you have up to one year following the
date you paid the additional tax to the
other state to file an amended North
Dakota return to claim the credit and
obtain a refund. This applies even
though the regular time periods for
filing a refund claim have expired.

Did you work in Montana?

If you worked in Montana while a
resident of North Dakota, the wages
you receive for this work are not
taxable by Montana under the income
tax reciprocity agreement between
the two states. If this applies to you,
but your employer withheld Montana

income tax from the wages, do not
complete this schedule. Instead, you
must file a Montana individual income
tax return to obtain a refund of the
Montana income tax withheld.
Income other than wages from
Montana sources—If you are a
resident of North Dakota and you paid
income tax to Montana on income
other than wages—such as income
from a business, rental property, or
the sale of real property—complete
Schedule ND-1CR to calculate the
allowable credit for the tax paid on
this income.

Did you work in Minnesota?

If you worked in Minnesota while
a resident of North Dakota and
maintained a home in North Dakota
to which you returned at least once
every month, the wages you receive
for this work are not taxable by
Minnesota under the income tax
reciprocity agreement between the
two states. If this applies to you, but
your employer withheld Minnesota
income tax from the wages, do not
complete this schedule. Instead,
you must file a Minnesota individual
income tax return to obtain a refund
of the Minnesota income tax withheld.
Income other than wages from
Minnesota sources—If you are a
resident of North Dakota and you paid
income tax to Minnesota on income
other than wages—such as income
from a business, rental property, or
the sale of real property—complete
Schedule ND-1CR to calculate the
allowable credit for the tax paid on
this income.

Specific line instructions
Line 1b
Enter the items of income, gain, loss,
and adjustments to income included
in your federal adjusted gross income
that have their source in the other
state. Generally, they have their
source in the other state if they are
taxable or deductible under the tax
laws of the other state or its local
jurisdictions. Do not include personal
or dependency exemptions, standard
deduction or itemized deductions,
or any other adjustment to federal
adjusted gross income allowed or
required by the tax laws of the other
state or its local jurisdictions.

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SFN 28721 (12-2023), Page 3
Include on this line your share of
income included in a composite
income tax return or a pass-through
entity income tax return filed in the
other state - see “Composite income
tax or pass-through entity income tax”
in these instructions.
Example: Taxpayer A is a full-year
resident of North Dakota. His federal
adjusted gross income is $49,000,
which consists of wages of $48,000
and interest income of $1,000. $5,000
of his wages was earned for work he
performed in another state and is
taxable by that state. The amount to
enter on line 1b of Schedule ND‑1CR
is $5,000, which is the portion of his
federal adjusted gross income that
has a source in the other state.
Line 1c
Enter the portion of line 1b that was
received or earned while a resident of
North Dakota.

Example: Taxpayer B was a resident
of a state other than North Dakota
from January 1 through June 30
and a North Dakota resident from
July 1 through December 31. While
a resident of the other state, she
received wages of $10,000 for
working in that state. After moving to
North Dakota, she earned additional
wages of $18,000 for working in North
Dakota. She also owns land located
in the other state from which she
received net rental income of $1,000
per month ($12,000 for the year).
Her federal adjusted gross income
is $40,000 ($10,000 + $18,000 +
$12,000). The wages of $10,000 and
the net rental income of $12,000
derived from the other state are
taxable by that state. The amount to
enter on line 1b of Schedule ND‑1CR
is $22,000, which is the portion of
her federal adjusted gross income
that has a source in the other state.
The amount to enter on line 1c of
Schedule ND-1CR is $6,000, which
is the portion of her net rental
income taxed by the other state that
she received while a North Dakota
resident.

Line 6
Enter on line 6 the amount of net
income tax shown on the other state’s
income tax return. If you also paid
income tax to a local jurisdiction in
the other state, include the amount
of net income tax shown on the local
jurisdiction’s income tax return (or, if
applicable, the other state’s return).
“Net income tax” means the amount
after income tax credits but before
withholding and estimated taxes. Do
not include on this line income tax
withholding shown on a Form W-2
or estimated income tax paid to the
other state or local jurisdiction.
Include on this line your share of
income tax paid on a composite
income tax return or a pass-through
entity income tax return filed in the
other state - see “Composite income
tax or pass-through entity income tax”
in these instructions.