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Category: North Dakota

North Dakota Subtractions from Income

Interest from U.S. Obligations

Enter the following in this area:

  • Interest income from U.S. obligations
  • Interest income from other securities that is specifically exempted from state income tax by federal statute
  • The portion of dividend income from a mutual fund attributable to investment in U.S. obligations and other securities that interest from which is exempted from state income tax by federal statute.

Common sources of interest income that may be entered here include:

  • U.S. savings bonds and Treasury bills and notes

Securities issued by:

  • Banks for cooperatives
  • Commodity Credit Corporation
  • Federal Deposit Insurance Corporation
  • Federal Farm Credit System
  • Federal Home Loan Banks
  • Federal Intermediate Credit Banks
  • Federal Land Banks
  • Federal Savings & Loan Insurance Corporations
  • Student Loan Marketing Association

Note: Do not enter on this line interest income from securities of the Federal Home Loan Mortgage Corporation (Freddie Mac), Federal National Mortgage Association (Fannie Mae), and Government National Mortgage Association (Ginnie Mae), nor from federal income tax refund or repurchase agreement.

ND Net Short-Term Capital Gain (Loss)

ND Net Long-Term Capital Gain (Loss)

If your federal taxable income includes a net long-term capital gain (including a capital gain distribution from a mutual fund), you may exclude 40% of that gain from your North Dakota taxable income. However, if you were a full-year nonresident or part-year resident of North Dakota for the tax year, the exclusion is limited to a net long-term capital gain based on the capital gains and losses reportable to North Dakota.

Native American’s Exempt Income

If you are an enrolled member of a federally-recognized Indian tribe who lived on any Indian reservation in North Dakota for all of 2013, enter on this line income you derived from sources on any Indian reservation in North Dakota. Do not enter income derived from non-reservation sources in North Dakota. If you lived in North Dakota in 2013, but you did not reside on an Indian reservation for part or all of 2011, do not enter income earned or received while living off of the reservation.

U.S. Railroad Retirement Board Benefits

Enter on this line unemployment, sick pay, or retirement benefits received from the U.S. Railroad Retirement Board that are included in federal taxable income.

Income From Pass-Through Entity Subject to ND Financial Institution Tax

Enter on this line the amount of North Dakota income from a partnership, S corporation, or other passthrough entity subject to North Dakota’s financial institution tax under N.D.C.C. ch. 57-35.3.

National Guard or Reserve Member Exclusion

If you were a member of the North Dakota National Guard or the U.S. armed forces reserve, and you were mobilized or activated for federal active duty service under Title 10, United States Code, enter the compensation received for that service. Do not enter compensation exempted from federal income tax, nor compensation received for attending annual training, basic military training, or professional military education. You will attach a copy of your Title 10 orders.

College SAVE Contribution Deduction

If you made a contribution in 2013 to a North Dakota College SAVE account administered by the Bank of North Dakota, you are allowed a deduction for the total contributions made during the year, up to a maximum deduction of $5,000 ($10,000, if married filing jointly). You are allowed the deduction regardless of whether you or someone else owns the account. A rollover of funds from another I.R.C. Section 529 college savings plan into a North Dakota College SAVE account does not qualify for the deduction.

New or Expanding Business Income Exemption (included in Line 16 calculations)

If you operate a business as a sole proprietorship and were granted a new or expanding business income exemption under N.D.C.C. ch. 40-57.1, enter the portion of your net business income that is eligible for the exemption. For more information on how to calculate the amount of the exempt income, see North Dakota Administrative Code § 81-03-01.1-06. Include on this line a new or expanding business income exemption from a North Dakota Schedule K-1.

Organ Donor Deduction (included in Line 16 calculations)

If you or your dependent, while living, donates part or all of a liver, pancreas, kidney, intestine, lung, or bone marrow for transplantation into another human being, you may deduct up to $10,000 of qualified expenses related to the donation.

Qualified expenses means:

  • Lost wages not compensated for by sick pay.
  • Medical expenses (as defined for federal income tax purposes) that you did not deduct in calculating your federal taxable income. Medical expenses for which you receive reimbursement under an insurance plan or other source do not qualify for the deduction.

If the qualified expenses are incurred in more than one tax year, the expenses must be deducted in the tax year in which they are incurred. Medical expenses are incurred when the medical care giving rise to the expense is actually provided, and not when the expenses are billed or paid. Enter on this line qualified expenses incurred during the 2013 tax year.

Employee Workforce Recruitment Exclusion (included in Line 16 calculations)

If you receive a statement from your employer verifying that your employer qualified for the North Dakota workforce recruitment income tax credit based on your employment, enter on this line the amount of the signing bonus, moving expense payment, or non-typical fringe benefit payment shown on the statement, but only to the extent it is included in your 2013 federal taxable income.