Schedule ME: Schedule ME - Credit for Wages Paid to Mobilized Employee (2025)
North Dakota · ND Tax Commissioner · Used for tax years 2025
North Dakota Schedule ME calculates the income tax credit for wages paid to mobilized employees. It reports mobilization dates, employer wages, federal active duty pay, and the credit available for 2025, including unused credit carryovers.
Who files this form
Use Schedule ME to claim the credit for wages paid to an eligible mobilized employee. You may qualify if, during the employee’s mobilization, you continued paying some or all of their wages and their federal active duty wages were less than what you would have paid had they not been mobilized.
The employee must be:
- A legal resident of North Dakota.
- A member of the National Guard or a reserve component of any branch of the U.S. armed forces.
- Mobilized for federal active duty under Title 10 of the United States Code during your tax year.
For the 2025 credit, at least part of the mobilization period must fall within your 2025 tax year.
What you'll need
Have the following information ready:
- Your taxpayer name as shown on the return and your Social Security number or FEIN.
- Each eligible employee’s name and Social Security number.
- The beginning and ending dates of the portion of mobilization falling within your 2025 tax year.
- The wages you would have paid during that period if the employee had not been mobilized.
- The wages you actually paid during that period.
- The employee’s federal active duty wages for that period. Obtain this information from the employee or their designated representative. Military Leave and Earnings Statements can be used to determine the amount.
- Any unused credit information needed for the carryover lines.
How to file
Attach Schedule ME to Form ND-1, 38, 40, 58, or 60. Complete additional schedules if you have more than three eligible employees.
For each employee:
- Enter their identifying information, mobilization dates, and wage amounts.
- Subtract federal active duty wages on line 3 from the wages you would have paid on line 2. If the result is zero or less, stop. You are not eligible for the credit for that employee.
- Enter the smaller of that difference or the wages you actually paid on line 6.
- Multiply line 6 by 25%. The credit on line 9 is the smaller of that result or $1,000.
Add the employee credits on line 10, then complete the applicable carryover and current-year credit lines.
Transfer line 13 to the applicable return location:
- Form ND-1: Schedule ND-1TC, line 13.
- Form 38: Schedule 38-TC, line 11.
- Form 40: Schedule TC, line 19, or Schedule CR, Part III, line 19.
- Form 58: Schedule K, line 16.
- Form 60: Schedule K, line 13.
The supplied text does not give a mailing address or e-filing directions.
Common mistakes
- Claiming a credit with no mobilization during your 2025 tax year. The credit is not allowed if no part of the mobilization period falls within that tax year.
- Continuing the calculation when line 4 is zero or less. The form says to stop because you are not eligible for the credit.
- Entering carryovers as a Form 58 or 60 filer. These filers must enter zero on lines 11 and 14.
- Leaving out employees beyond the first three. Complete additional schedules as needed.
- Failing to attach the schedule. Schedule ME must be attached to the applicable return.
Questions people ask
What counts as wages for this credit?
Wages include gross wages before payroll taxes, elective defined contribution plan contributions, and other payroll deductions, plus the employer’s contributions to the employee’s defined contribution plan.
How much is the credit for each employee?
The credit is 25% of the smaller of the line 4 wage difference or the wages you actually paid during mobilization, limited to $1,000 per employee.
Can unused credit carry over to 2026?
The line 14 instructions say unused credits from the 2023, 2024, and 2025 tax years are eligible for carryover to 2026. Form 58 and 60 filers must enter zero on line 14.
How do partnerships and S corporations complete line 13?
Partnerships, S corporations, and limited liability companies treated as either must enter the amount from line 12 on line 13. The line 13 instructions tell them to skip line 14; the form separately directs Form 58 and 60 filers to enter zero on line 14.