Living in North Dakota, working in Montana
Reciprocal agreement · tax year 2026
You pay North Dakota
$106
on a seventy-thousand wage
Montana would want
$2,594
The agreement is worth
$2,488
a year
File this
MW-4
with your employer
What the agreement does for you
- Cross the line from North Dakota into Montana for work and you keep money you would otherwise lose. The home charge on seventy thousand dollars is $106. Montana would have wanted $2,594 for the same wage. Because the two states have a deal, you pay home only, and $2,488 a year never leaves.
- Watch what happens as the salary grows. At forty-five thousand dollars North Dakota takes $0. At a hundred thousand it takes $691, while Montana would have wanted $4,289. The distance between two states is rarely a fixed amount — it is a function of what you earn.
- One piece of paper stands between you and this. Your employer needs the Montana exemption certificate from you, usually once a year. Without it they must keep withholding Montana tax from a North Dakota resident. You would then be filing a return there after all.
- Wages earned in Montana by a North Dakota resident attract $106 rather than $2,594 at seventy thousand dollars, the agreement suppressing a differential of $2,488. ⚠️ That differential — not the work state's gross liability — is the correct statement of benefit, since the ordinary credit mechanism would have relieved the home charge rather than the foreign one.
- Scaling matters here: North Dakota charges $0 on forty-five thousand dollars and $691 on one hundred thousand, where Montana would levy $4,289 on the latter. Because state schedules differ in both rate and structure, the interstate differential is a function of income rather than a constant, and comparisons drawn at a single salary generalize poorly.
- The benefit is conditional on filing the exemption certificate with the employer, typically renewed annually. ⚠️ Employer withholding defaults to the work state in its absence, irrespective of eligibility, and the remedy is a nonresident return in Montana. The practical failure mode is therefore not ineligibility but non-election — the agreement exists and the commuter simply never claims it.
What lands in your account
A $75,000 salary
Filing as
Paid
$2,361per paycheck
| Take-home, year | $61,389 |
|---|---|
| Tax, year | $13,611 |
| Share of pay taxed | 18.15% |
This is an average rate across all your pay — not the rate on your next dollar.
North Dakota against Montana
A $75,000 salary
Compare with
−$4,246a year in Montana, once local prices are leveled
| Measure | North Dakota | Montana |
|---|---|---|
| Take-home pay | $61,389 | $58,716 |
| Worth after local prices | $69,310 | $65,063 |
| Share of pay taxed | 18.15% | 21.71% |
| State sales tax | 5% | 0% |
| Groceries exempt here | Yes | Yes |
| Clothing exempt at $100 | No | Yes |
| Property tax rate | 0.99% | 0.72% |
| Price level | 88.6 | 90.2 |
| Housing prices | 69.4 | 76.7 |
| Fuel tax | 23¢ | 33¢ |
| Tobacco tax | $0.44 | $1.70 |
City income tax excluded. Sales-tax row: state-only. Exemptions: North Dakota, Statewide average; Montana, No general sales tax. Clothing: one $100 item; higher prices can change tax.
What you would need there
A $75,000 salary
Moving to
$80,923in Montana, for the same life
| To match take-home only | $79,132 |
|---|---|
| Raise you would need | +$5,923 |
| Prices in Montana | 90 vs 89 |
State taxes and state price levels only. No city tax, and no housing market.
What each state would charge, across the ladder
Reference wages for a single filer, not a claim about anyone's salary. The last column is the difference the agreement actually removes — which is the gap between the two states, not Montana's whole charge.
| Wage | North Dakota charges | Montana would charge | Agreement is worth |
|---|---|---|---|
| $45,000 | $0 | $1,358 | $1,358 |
| $70,000 | $106 | $2,594 | $2,488 |
| $100,000 | $691 | $4,289 | $3,598 |
What this page cannot tell you
- This covers wages from a job. It does not cover self-employment, rent or investment income — those follow the ordinary rules for Montana.
- ⚠️ And it is a deal between two states. City and county taxes are not part of it, and several of these states have them.
- The comparison here assumes a single filer and treats both states as taxing the same income. Your own numbers will differ.
- Every agreement in this dataset applies to wages and salaries only. Business, rental, gain and investment income sourced to Montana remains taxable there under ordinary nonresident rules, and a commuter with such income may still owe a Montana return notwithstanding the agreement.
- ⚠️ Reciprocity binds the state layer only and commonly does NOT extend to municipal or county income taxes — Pennsylvania's local earned income tax is the standard example, remaining payable at the place of employment despite the state-level agreement. Local liabilities are excluded from every figure on this page.
- Figures are computed for a single filer at the stated wage, treating North Dakota's and Montana's definitions of taxable income as equivalent and modeling the resident credit as limited to the home state's own liability. Real returns diverge on filing status, deductions each state allows separately, and credit limitation rules — so these are comparative magnitudes, not a computation of anyone's liability.