New Withholding Tables and Rates
by Cory Fong, Tax Commissioner

The North Dakota economy has shown resilience and has continued to grow
during a time when much of the nation has faced financial struggles.  The
state's healthy budget surplus afforded the 2009 Legislative Assembly a
unique opportunity to extend tax relief. 

One form of tax relief that the 2009 Legislature passed, and Governor Hoeven
signed into law, was the individual income tax relief contained in Senate
Bill 2199.  That portion of the bill reduced North Dakota's five individual
income tax rates.  The rates changed as follows, beginning with tax year
2009:

Old Rates New Rates
2.10% 1.84%
3.92% 3.44%
4.34% 3.81%
5.04% 4.42%
5.54% 4.86%

Due to the change in rates, the Tax Department revised the 2009 Withholding
tables.  The original withholding tables, which were published before the
start of the 2009 session, used the old rates.  Since SB 2199 was signed
into law, the Tax Department has adjusted the tables so that an employee's
withholding that is based on the new tables would more accurately reflect
the correct amount of tax due.  It is important to note that the new tables
do not compensate for the portion of tax year 2009 on which withholding was
computed using the old tables.  It is possible that employees will be over
withheld for tax year 2009, which might increase the amount of their refund
when they file their income tax return in 2010.

The revised withholding tables are available for you to use and you may
access the tables on the Tax Department's web site at www.nd.gov/tax.
Employers, payroll services, and employees may use these if they want,
however the Tax Department does not require the withholding to be changed
for 2009.  In addition, you do not need to adjust any previous withholding
amounts for 2009 to account for the change. 

The Tax Department will create new withholding tables and rates for 2010,
which will be available at the end of this year.  If you have questions or
need more information about the withholding tables, please visit our web
site at www.nd.gov/tax or contact the department at 701.328.1248