Live in North Dakota, Work in Montana: Which State Taxes Your Paycheck?
Answer
North Dakota and Montana have a reciprocity agreement, so only North Dakota taxes you. Give your employer Form MW-4 and Montana stops withholding entirely. You then file one return — the North Dakota resident return — and no Montana nonresident return is required at all.
Last verified
Reciprocity is the cleanest outcome in multi-state wage tax, and also the one most often missed, because it only works if you file the certificate. The agreement between North Dakota and Montana does not apply itself: an employer that never receives Form MW-4 keeps withholding.
Montana's only reciprocal agreement is with North Dakota. A North Dakota resident working in Montana claims the exemption on Montana Form MW-4.
The certificate goes to your employer's payroll department, not to Montana Department of Revenue, and it is not retroactive — filing it in June does not recover Montana tax withheld in January. That money comes back only by filing a Montana nonresident return for the year and claiming a refund.
What you file
- 1Give to your employer · MontanaForm MW-4
Give your employer Form MW-4 so Montana stops withholding. This goes to the employer, not to Montana Department of Revenue — and it is not retroactive, so file it before the first paycheck of the year.
- 2Resident return · North Dakota
File a North Dakota resident return reporting all of your income, including the wages earned in Montana.
The two states, side by side
| North Dakota | Montana | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | 2 (Form NDW-R) | 1 (Form MW-4) |
| Convenience rule | No | No |
| Nonresident return | Form ND-1 with Schedule ND-1NR | Form 2 with the nonresident/part-year schedule |
| Credit for other-state tax | Schedule ND-1CR | Form 2 (credit for income tax paid to another state) |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | North Dakota Office of State Tax Commissioner | Montana Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Montana and working in North Dakota gives:Reciprocal agreement — file the exemption form.
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.
- Remote worker: North Dakota → MontanaHome state only
- 1099 contractor: North Dakota → MontanaHome state, plus the client state if you work there
- Moved mid-year: North Dakota → MontanaTwo part-year returns
Other North Dakota pairs
Questions people actually ask
I live in North Dakota and work in Montana. Which state takes the tax out of my paycheck?
North Dakota and Montana have a reciprocity agreement, so only North Dakota taxes you. Give your employer Form MW-4 and Montana stops withholding entirely. You then file one return — the North Dakota resident return — and no Montana nonresident return is required at all.
Which state should my employer be withholding for?
North Dakota. Your employer should withhold North Dakota tax rather than Montana tax on these wages, but only once you have given payroll Form MW-4 — the exemption is not automatic and it does not apply retroactively. If a Montana line is showing on your pay stub, raise it with payroll now rather than at filing time.
What if Montana tax was already withheld from my pay?
File Form MW-4 with your employer to stop it going forward, then recover what was already taken by filing a Montana nonresident return for that year and claiming a refund of the full amount. North Dakota will still expect its own tax on the same wages, so do not treat the refund as a windfall.
How current is this?
The North Dakota and Montana rules on this page were last checked against North Dakota Office of State Tax Commissioner and Montana Department of Revenue 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.
- North Dakota Office of State Tax Commissioner — individual income taxaccessed 2026-08-07
- Montana Department of Revenue — individual income taxaccessed 2026-08-07