Schedule ND-1CR: Schedule ND-1CR - Credit for Income Tax Paid to Another State (2025)
North Dakota · ND Tax Commissioner · Used for tax years 2025
Schedule ND-1CR calculates the 2025 North Dakota credit for income tax paid to another state or local jurisdiction. It reports income taxed by both jurisdictions, the tax paid to the other jurisdiction, and the credit to enter on Form ND-1.
Who files this form
Use Schedule ND-1CR to claim a credit if you qualify. You may be eligible if:
- You were a North Dakota resident for all or part of 2025.
- You paid income tax for 2025 to North Dakota and another state or local jurisdiction on the same income.
For part-year residents, the eligible income must have been earned or received while you were a North Dakota resident and reported on Schedule ND-1NR, line 18.
If you file jointly and you and your spouse have different residency statuses, either or both of you may qualify. Use the part-year resident lines if either spouse was a part-year resident.
The credit requires an income tax return filed with the other state or local jurisdiction, either by you or by a pass-through entity for qualifying composite or entity-level income tax. Withholding or estimated tax payments alone do not qualify.
What you'll need
Have these forms and figures available to complete the schedule:
- Form ND-1: Federal adjusted gross income from line 1a and North Dakota tax from line 20. Full-year residents also use line 5 to calculate Schedule ND-1CR, line 2.
- Schedule ND-1NR, if you were a part-year resident: Use line 18 for Schedule ND-1CR, line 2.
- The other state's income tax return: Use the net income tax shown on that return. If you also paid local income tax, use the applicable local or state return.
- Income information: Identify the portion of your federal adjusted gross income sourced to the other state and the portion earned or received while you were a North Dakota resident.
- Qualifying pass-through entity information, if applicable: You need your share of income and income tax reported on a composite or pass-through entity income tax return.
The schedule also asks for your name, Social Security number, and the name of the other state.
Common mistakes
- Using withholding or estimated payments as the credit amount. Line 6 uses net income tax after tax credits but before withholding and estimated taxes. Do not enter Form W-2 withholding or estimated payments.
- Continuing when you are not eligible. If there is no qualifying income on line 1b or line 1c, stop. You are not eligible for the credit.
- Using the wrong residency lines. Full-year residents complete line 7. Part-year residents skip line 7 and complete lines 8 through 11. For joint filers, use the part-year lines if either spouse was a part-year resident.
- Including deductions that do not belong on line 1b. Do not include personal or dependency exemptions, standard or itemized deductions, or other adjustments to federal adjusted gross income allowed or required by the other jurisdiction's tax laws.
- Claiming taxes that do not qualify. The credit does not cover foreign income taxes or taxes other than income taxes, such as property or sales taxes.
Questions people ask
What if I paid income tax to more than one other state?
Complete a separate Schedule ND-1CR for each state. Include local income tax on the schedule for the state where that local jurisdiction is located. Add the credits from all schedules and enter the total on Form ND-1, line 21.
Does the credit cover the District of Columbia or U.S. territories?
Yes. For this credit, “state” includes the other 49 U.S. states, the District of Columbia, and U.S. territories. A local jurisdiction includes a city, township, or county within a state.
What if Montana tax was withheld from my wages?
If you worked in Montana while a North Dakota resident, those wages are not taxable by Montana under the states' reciprocity agreement. Do not use this schedule for that withholding. File a Montana individual income tax return to obtain a refund. Montana tax on other income, such as business or rental income, may qualify for the credit.
What if Minnesota tax was withheld from my wages?
If you worked in Minnesota while a North Dakota resident and maintained a North Dakota home to which you returned at least once every month, those wages are not taxable by Minnesota under the states' reciprocity agreement. Do not use this schedule for that withholding. File a Minnesota individual income tax return to obtain a refund. Minnesota tax on other income, such as business or rental income, may qualify for the credit.