Montana has a reciprocity agreement with North Dakota.
This means Montana residents earning income in North Dakota pay taxes in Montana instead of North Dakota.
The reciprocity agreement only applies to personal services income. This includes:
- Commissions, and
- Fees earned by an employee.
If you have other types of income in North Dakota, you may have to file and pay North Dakota individual income tax.
You can learn more about North Dakota’s tax requirements on the North Dakota Office of State Tax Commissioner website.
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.
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.
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.
You must submit a new Form MW-4 before the end of each year to claim the North Dakota Reciprocity Exemption.
If you received wages covered by reciprocity and your employer withheld Montana income tax, you must file a Montana individual income tax return to obtain a refund.
Learn more about Montana individual income tax returns.