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Military Personnel Guideline

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The only way to know for sure which form is best for you is to calculate the tax on both forms and compare the

results; ﬁ le the form showing the lowest tax.

Deductions available to military personnel

If Form ND-1 is used, the following deductions are allowed to military personnel:

●

For 2003 and after, compensation for federal active duty received while a nonresident of North Dakota is

deductible in calculating North Dakota taxable income.

●

For 2003 and after, if you are a member of the North Dakota National Guard or the Reserve who is

mobilized for federal active duty under Title 10, U.S. Code, your compensation received for the federal

active duty service is deductible in calculating North Dakota taxable income. However, you may not

deduct any part of this compensation that is excluded from federal income tax, nor may you deduct

any compensation received for attending annual training, basic military training, professional military

education, or active duty for which you volunteered and did not receive mobilization orders.

If Form ND-2 is used, the following deductions are allowed to North Dakota resident military personnel:

●

Up to $1,000 of compensation received for federal active duty.

●

Up to $1,000 of compensation received for attending periodic training for drill and instruction as a member

of the National Guard or Reserve.

●

If you are on federal active duty overseas for at least 30 days during the year, up to $300 of your

compensation received for that duty is allowed for each month (or fraction of a month) you are overseas.

Overseas duty means that you are stationed outside any of the U.S. states and the District of Columbia.

The following officers are not eligible for this overseas deduction:

○

Major or higher rank in the U.S. Army, Air Force, or Marine Corps.

○

Lieutenant commander or higher rank in the U.S. Navy.

○

Surgeon or higher rank in the commissioned corps of the U.S. Public Health Service or the National

Oceanic and Atmospheric Administration.

●

If you are at least 50 years old, you may deduct up to $5,000 of your retirement pay received for service in

the U.S. armed forces or any of its reserve components. If you also received social security benefits, you

must reduce your allowable deduction by the amount of those benefits.

Important: Eligibility for any of the above deductions allowed on Form ND-2 does not mean you should

automatically use Form ND-2. It is very possible that your tax liability will be less on Form ND-1 (without the

deduction). The only way to know for sure which form is best for you is to calculate the tax on both forms and

compare the results; ﬁ le the form showing the lowest tax.

Extension of time to ﬁ le

Federal active duty in a combat zone.

North Dakota generally follows federal income tax law as to an extension of time to ﬁ le a North Dakota income

tax return. Therefore, U.S. armed forces members who serve, or provide direct support to military operations, in a

presidentially-declared combat zone have until the extended due date of their federal income tax return to ﬁ le their

North Dakota income tax return without penalty or interest. For more information on the federal extended due dates

for military personnel serving in a combat zone, go to the IRS’s web site at

Treatment Of Military Personnel Guideline - Income Tax - North Dakota Offi Ce Of State Tax Commissioner Page 5

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