North Dakota Capital Gains Tax Rate (2026)
North Dakota capital gains tax overview
Three brackets with a 0% bottom bracket through $48,475 (single). Maximum rate 2.5%.
Federal + North Dakota combined rates
Your total capital gains tax bill includes both layers — federal and state. Here is what an investor in North Dakota pays in 2026 for long-term gains:
| Federal Long-Term Rate | North Dakota State Rate | Combined Rate | Plus NIIT (if applicable) |
|---|---|---|---|
| 0% | 2.50% | 2.50% | 6.3% |
| 15% | 2.50% | 17.5% | 21.3% |
| 20% | 2.50% | 22.5% | 26.3% |
The NIIT (Net Investment Income Tax) adds an extra 3.8% for taxpayers whose MAGI exceeds $200,000 (single) or $250,000 (married filing jointly). It is a federal tax only — North Dakota does not have an equivalent.
How North Dakota compares to other states
North Dakota's top rate of 2.50% places it in the lower-middle tier of state capital gains taxation. For comparison:
- Zero-tax states (FL, TX, NV, etc.): 0% — total with 15% federal = 15%
- Low-rate states (AZ, IN, PA): 2.5–3.1% — total with 15% federal = 17.5–18.1%
- North Dakota: 2.50% — total with 15% federal = 17.5%
- High-rate states (NY, NJ): 10.75–10.9% — total with 15% federal = ~26%
- California: 13.3% — total with 15% federal = 28.3%
Tax-reduction strategies for North Dakota residents
With a top state rate of 2.50%, minimizing capital gains tax is particularly important in North Dakota. Key strategies:
- Hold over 1 year for long-term federal rates (0/15/20%). North Dakota does not offer a preferential state rate, but federal savings alone are often 7–17%.
- Tax-loss harvesting: Offset your gains with losses realized in the same year. A $20,000 loss offsets $20,000 of gains dollar-for-dollar, saving up to 23% ($4,600) on that $20,000 at top rates.
- 0% bracket planning: In lower-income years (retirement, sabbatical, between jobs), realize gains at the federal 0% rate. You still owe North Dakota state tax, but eliminating the federal component is significant.
- Donate appreciated stock directly to charity or a donor-advised fund to avoid capital gains tax entirely while generating a charitable deduction for the full fair market value.
- Installment sales: If selling a business or real estate, structuring as an installment sale spreads the gain over multiple years, potentially keeping each year's gain in a lower bracket.
Frequently asked questions — North Dakota
Does North Dakota tax short-term and long-term gains differently?
No — North Dakota taxes both short-term and long-term capital gains as ordinary income at the same rates as wages. There is no state-level preferential rate for patience. The federal system, however, taxes long-term gains at 0/15/20% vs. up to 37% for short-term — a significant difference that applies regardless of state.
Do I need to file a state tax return in North Dakota if I only have capital gains?
If you have capital gains income and meet North Dakota's filing threshold, you are required to file a state income tax return in North Dakota. The threshold is typically similar to the standard deduction amount — check the ND Department of Revenue for the current year's filing requirements.
What if I moved to North Dakota mid-year?
If you moved to North Dakota during the year, you are a part-year resident. North Dakota generally taxes capital gains realized while you were a resident of North Dakota. Gains realized before you moved may be taxable by your prior state. Keep detailed records of when each sale occurred relative to your move date.