North Dakota taxes most of the income earned in the state. This includes wages and commissions from employment, as well as net self-employment earnings. Some kinds of unearned income are also taxable, so you will need to consult the North Dakota Office of State Tax Commissioner website for complete instructions regarding taxable income.c  

Before you begin working on a return, however, you will want to make sure that you are required to file a tax form. You may be able to skip filing this year if you do not meet the income threshold to file. For detailed filing requirements, see the state tax form instructions.c 

To begin preparing your North Dakota taxes, the first thing you need to do is assemble all of your relevant tax paperwork. This will include all of your income and some personal identification information. You will need the following to complete your North Dakota tax return:

1. Your Social Security number
2. Your current mailing address
3. Your spouse's full name and Social Security number, if you are filing a joint tax return
4. The total amount of earned income for the tax year - If you are an employee, this will be reported on your Form W-2 or Form 1099 as state wages. If you are self-employed, you will need to total your gross earnings yourself and then subtract any qualified business expenses.
5. The total amount of unearned income that is subject to North Dakota state tax - This includes, but is not limited to, unemployment compensation, retirement distributions, and lottery winnings.
6. The total state income tax you paid in during the year - For employees, this will be shown on your Form W-2 as state taxes withheld. For self-employed individuals, this will be the total of any estimated tax payments you made.
7. A copy of your federal income tax return, if you are filing one
   

If you will be filing a federal tax return, be sure to complete that form before you begin your state tax forms. You will need the amount of your federal adjusted gross income, or AGI, as a starting point for your state return. If you will not be filing a federal return, you may want to consult a tax professional to help you calculate your federal AGI.c

In North Dakota, you have the option to file using Form ND-1 "Individual Income Tax Return" or Form ND-1 EZ "Short Form". To use the short form, you must meet certain tests regarding income and residency. Most taxpayers will qualify to use Form ND-1.c

If you have access to the Internet, you can download the tax form and the accompanying instructions from the North Dakota Office of State Tax Commissioner website. If you do not have Internet access, you can usually pick up a paper copy of the form and instructions from your local library.c 

Should you decide to file your federal return using tax preparation software or a tax preparation website, you will usually be given the option to file your state return electronically for an additional fee. This is usually the most convenient option, since you can follow the screen prompts to complete your return. If you meet the income limits, you may even be able to electronically file your state return for free.c 

To use the state tax form downloads, you can either use a copy that can be printed out and completed by hand or you can download a web fill-in version that you can complete on your computer. If you choose to complete it by hand, be sure to write legibly and use black ink.c

You are now ready to complete your tax forms. Begin by entering your name and Social Security number, as well as your spouse's if applicable. Then complete the address section and select the appropriate filing status. You will have to use the same filing status you used on your federal return.c 

Now is a good time to stop and read the state tax form instructions in their entirety. The instructions explain how to complete the form and state income adjustments and tax credits you may be able to claim on your return. To continue your return, take out your IRS Form 1040. Locate your federal adjusted gross income and enter that on line D of your Form ND-1. Then enter your federal taxable income on line 1.c 

Proceed through the return making income adjustments as necessary until you arrive at your North Dakota taxable income. Be sure to stop and consult the instructions when you get to a line that you need help with. Once you calculate your state taxable income, stop and consult the tax tables in the instructions to assess your tax liability. Enter this as your tax on line 20.c  

Subtract any eligible state tax credits and your state income tax payments made through withholding or estimated tax payments. If you have additional tax left over after this, you will have a balance due. If you have a negative amount of tax, you have overpaid and you will be issued a refund. For refunds, select if you would like to receive your payment by a paper check or via direct deposit.c 

Sign and date the completed form and have your spouse do the same. Then, make a copy of your return for your personal records. To file by mail, enclose the return in an envelope along with a check or money order for any balance due. Send both to the address given on the form. To file electronically, simply follow the screen prompts to submit your return.c

Remember: The state filing deadline is April 15, so you need to submit your return on or before that date to avoid late penalties. If you will be unable to complete your state return before the April 15 deadline, you'll need to file a North Dakota state tax extension.