North Dakota Reciprocity Agreement

Montana has a reciprocity agreement with North Dakota. This means that Montana residents earning income in North Dakota pay Montana income tax instead of North Dakota income tax.

Income Covered by the Agreement

The reciprocity agreement only applies to personal services income. This includes:

  • Salaries
  • Wages
  • Commissions
  • Fees earned by an employee

If you have other types of income in North Dakota, you may still be required to file and pay North Dakota individual income tax.

Learn more about North Dakota tax requirements from the North Dakota Office of State Tax Commissioner.

North Dakota Residents Working in Montana

If you are a North Dakota resident earning wages in Montana, you may be exempt from Montana withholding tax by completing the Montana Employee Withholding Allowance and Exemption Certificate (Form MW-4) and submitting it to your employer.

Deadlines:

  • To Employers: Forms MW-4 used for North Dakota Reciprocity Exemptions are due to employers as soon as an employee is hired or as soon as they qualify for the exemption.
  • To the Department of Revenue: Forms MW-4 used for North Dakota Reciprocity Exemptions are due to us on the last day of the payroll period you received the form from your employee.
  • Annual Renewal: Forms MW-4 used for North Dakota Reciprocity Exemptions are due to us on the last day of the payroll period you received the form from your employee.

If Montana Tax Was Withheld in Error

If you received wages covered by the reciprocity agreement and your employer withheld Montana income tax, you must file a Montana individual income tax return to obtain a refund.