$LevyIO

Health Coverage Tax Credit (HCTC) in North Dakota 2026

Calculate your health coverage tax credit (hctc) tax savings in North Dakota. With North Dakota's 1.95% top state tax rate, your combined savings are higher.

North Dakota Tax Overview

State Income Tax
1.95%
flat
Sales Tax
5%
avg combined: 6.96%
Property Tax Rate
0.94%
Median Income
$68,131

Flat 1.95% — one of the lowest. Uses federal taxable income. Oil revenue keeps rates low.

North Dakota Income Tax Brackets (Single)

1.95%
$0 +
Your bracket
$5,000
Est. Total Savings
No Limit
Max Deduction
Tax Credit
Deduction Type
23.9%
Combined Tax Rate

Health Coverage Tax Credit (HCTC) Savings Calculator for North Dakota

$
$

Federal Savings

$5,000

22% bracket

North Dakota State

$0

1.95% rate

Total Savings

$5,000

23.9% combined

Tax credits reduce your tax bill dollar-for-dollar, regardless of your tax bracket.

Savings by Tax Bracket in North Dakota

10%
$5,000
12%
$5,000
22%
$5,000
24%
$5,000
32%
$5,000
35%
$5,000
37%
$5,000

Includes 1.95% North Dakota state tax on top of federal savings.

Eligibility Requirements

Trade-displaced workers receiving TAA benefits and PBGC pension recipients

  • 1Must receive Trade Adjustment Assistance
  • 2Or be a PBGC pension recipient aged 55-64
  • 3Covers 72.5% of qualified health insurance premiums

North Dakota residents should verify that this deduction is also recognized on their state tax return for additional savings of up to 1.95%.

Common Mistakes to Avoid

  • !Not filing monthly with the IRS for advance payments
  • !Missing open enrollment periods
  • !Not keeping proof of qualifying coverage
  • !Forgetting to claim the deduction on your North Dakota state return (missing up to 1.95% additional savings)

North Dakota Filing Tips

The 1.95% rate makes ND nearly as tax-friendly as no-income-tax states. Federal standard deduction applies. Homestead credit available for qualifying homeowners.

Required Tax Forms

Form 8885Form 1040

File these forms with your federal tax return to claim the health coverage tax credit (hctc). North Dakota may require additional state-specific forms.

Other Tax Deductions in North Dakota

Medical & Dental Expenses

Medical

~$3,266
est. savings

Self-Employed Health Insurance

Medical

~$5,443
est. savings

HSA Contribution Deduction

Medical

~$1,960
est. savings

Long-Term Care Insurance

Medical

~$2,177
est. savings

Medical Travel Expenses

Medical

~$871
est. savings

Flexible Spending Account (FSA)

Medical

~$980
est. savings

Medical Equipment & Devices

Medical

~$1,633
est. savings

Therapy & Counseling

Medical

~$2,177
est. savings

Health Coverage Tax Credit (HCTC) in Neighboring States

Montana

5.9% top rate (flat)

~$3,200
-1,800 vs North Dakota

South Dakota

No state income tax

~$3,200
-1,800 vs North Dakota

Minnesota

9.85% top rate (progressive)

~$3,200
-1,800 vs North Dakota

Tax Calculators for North Dakota Cities

FargoBismarckGrand Forks

Calculate Your Full Tax Savings in North Dakota

Use our free tax calculators to optimize your entire tax return for North Dakota.

Income Tax CalculatorNorth Dakota Income TaxFull Health Coverage Tax Credit (HCTC) Guide

Frequently Asked Questions

How much can I save with the Health Coverage Tax Credit (HCTC) in North Dakota?

In North Dakota, the health coverage tax credit (hctc) can save you an estimated $5,000 per year on a $5,000 deduction. This includes $5,000 in federal tax savings and $0 in North Dakota state tax savings at the 1.95% marginal rate. The national average savings is $3,200/year.

What is the North Dakota state income tax rate?

North Dakota has a flat income tax system with a top rate of 1.95%. Flat 1.95% — one of the lowest. Uses federal taxable income. Oil revenue keeps rates low.

Who qualifies for the Health Coverage Tax Credit (HCTC) in North Dakota?

Trade-displaced workers receiving TAA benefits and PBGC pension recipients. The eligibility requirements are the same whether you live in North Dakota or another state, as this is a federal tax credit. However, your total savings will vary based on North Dakota's 1.95% top state tax rate.

What tax forms do I need to claim the Health Coverage Tax Credit (HCTC) in North Dakota?

To claim the health coverage tax credit (hctc), you need to file Form 8885 and Form 1040 with your federal return. North Dakota residents should also check if the state allows this deduction on their state return for additional savings of up to 1.95%. Filing status affects your deduction limits and tax bracket.

Is the Health Coverage Tax Credit (HCTC) better in North Dakota than in states without income tax?

Yes, North Dakota residents benefit more because the state's 1.95% top income tax rate means the deduction reduces both your federal AND state tax liability. In states with no income tax (like Texas, Florida, or Nevada), this deduction only reduces federal taxes. Your combined rate of 23.9% means more savings per dollar deducted.

What is the standard deduction in North Dakota for 2026?

North Dakota's standard deduction is $14,600 for single filers and $29,200 for married filing jointly. The 1.95% rate makes ND nearly as tax-friendly as no-income-tax states. Federal standard deduction applies. Homestead credit available for qualifying homeowners.

Related Calculators

Medical & Dental Expenses in North Dakota

Avg savings: $3,000/year

Self-Employed Health Insurance in North Dakota

Avg savings: $5,000/year

HSA Contribution Deduction in North Dakota

Avg savings: $1,800/year

Long-Term Care Insurance in North Dakota

Avg savings: $2,000/year

Medical Travel Expenses in North Dakota

Avg savings: $800/year

Flexible Spending Account (FSA) in North Dakota

Avg savings: $900/year