Live in Kentucky, Work Remotely for a North Dakota Employer: Who Taxes You?
Answer
Only Kentucky taxes you. North Dakota levies no personal income tax on wages, so nothing is withheld there and you file no North Dakota return. Kentucky taxes its residents on all income wherever earned, which means your North Dakota earnings go on a Kentucky resident return in full.
Last verified
Crossing into a state with no income tax does not lower your tax bill, because your home state is not taxing you on where you work — it is taxing you on where you live. Kentucky reaches all of a resident's income, and North Dakota adds nothing on top.
What you file
- 1Resident return · Kentucky
File a Kentucky resident return reporting all of your income.
The two states, side by side
| Kentucky | North Dakota | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — graduated |
| Reciprocity partners | 7 (Form 42A809) | 2 (Form NDW-R) |
| Convenience rule | No | No |
| Nonresident return | Form 740-NP | Form ND-1 with Schedule ND-1NR |
| Credit for other-state tax | Schedule ITC | Schedule ND-1CR |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | No |
| Revenue department | Kentucky Department of Revenue | North Dakota Office of State Tax Commissioner |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in North Dakota and working in Kentucky gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Kentucky → North DakotaBoth states — credit offsets the double tax
- 1099 contractor: Kentucky → North DakotaHome state, plus the client state if you work there
- Moved mid-year: Kentucky → North DakotaTwo part-year returns
Other Kentucky pairs
Questions people actually ask
I live in Kentucky and work remotely for a North Dakota employer. Which state do I pay?
Only Kentucky taxes you. North Dakota levies no personal income tax on wages, so nothing is withheld there and you file no North Dakota return. Kentucky taxes its residents on all income wherever earned, which means your North Dakota earnings go on a Kentucky resident return in full.
Which state should my employer be withholding for?
Kentucky. Your employer should withhold Kentucky tax rather than North Dakota tax on these wages. If a North Dakota line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my North Dakota employer's location alone create a North Dakota tax obligation?
No. North Dakota sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside North Dakota are a different matter — those are North Dakota-source income and can require a nonresident return.
How current is this?
The Kentucky and North Dakota rules on this page were last checked against Kentucky Department of Revenue and North Dakota Office of State Tax Commissioner on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Kentucky Department of Revenue — individual income taxaccessed 2026-08-07
- North Dakota Office of State Tax Commissioner — individual income taxaccessed 2026-08-07