Hibou Odoo Suite Enterprise: State of North Dakota: Filing State Income Taxes, W-2s, and 1099s

Purpose

The purpose of this documentation is to outline the processes and requirements associated with filing state income taxes as well as how to file W-2s and 1099s, if needed, in the state of North Dakota.

State Income Tax Withholding

North Dakota does not have a form comparable to Federal Form W-4. The information on the W-4 is also used for North Dakota income tax withholding purposes. If an employee claims exempt status on the W-4, the exempt status is recognized for North Dakota income tax withholding purposes. If an employer is required to submit a copy of the W-4 to the IRS, the employer must also submit a copy of the W-4 to the North Dakota Office of State Tax Commissioner.

State Income Tax Withholding Reporting & Deposits

Every employer required to withhold North Dakota income tax must file an income tax withholding return on a calendar quarter basis (or, if eligible, on a calendar year basis) and pay the tax withheld with the return. The income tax withholding return may be filed on either the North Dakota Taxpayer Access Point (TAP) system, or on paper (you can download Form 306 - Income Tax Withholding Return online).

If you are paying by check, complete Part III of the paper Form 306 and make your check payable to North Dakota Tax Commissioner. Electronic payments may be made at Taxpayer Access Point (TAP) by clicking the Make a Payment link under the Businesses section.  


W-2 and 1099 Forms

Every employer is required to file a copy of all Federal Form W-2s issued and any Federal Form 1099s with state income tax withheld with the Office of State Tax Commissioner to report income earned during the calendar year by January 31st of the subsequent year.   

In addition to the information required to be shown on W-2 or 1099 for federal tax purposes, the copy of W-2 or 1099 filed with North Dakota must show the total amount of North Dakota wages or income earned and North Dakota income tax withheld for the calendar year. Except where an employer is required to file W-2 or 1099 information electronically (10 or more employees), an employer may file the information in paper document form (less than 10 employees).  

Filing of W-2s and 1099s can easily be done electronically by using the Taxpayer Access Point (TAP)

North Dakota participates in the Combined Federal/State Program offered by the IRS. Rather than submitting Form 1099 information electronically to both the IRS and North Dakota, the payor can request that the IRS provide a copy of the information to North Dakota. 

If this option is chosen, the following requirements and procedures apply:

  • The payor must notify the Office of State Tax Commissioner in writing that the IRS has granted permission to file Form 1099 information electronically and that the payor intends to satisfy part or all of its North Dakota information return filing requirement through the Combined Federal/State Program.

  • The payor must follow the IRS guidelines for creating a “B” record for the state data. North Dakota does not require any separate notification when filing in this manner. See IRS Publication 1220 for more details.

  • This option may not be used to report any payment from which North Dakota income tax is withheld. See Conditions and procedures applicable to payments from which North Dakota income tax is withheld on page 2 of this guideline for more information.

For more details, see the 2019 Income Tax Withholding Rates & Instructions.