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Railroad Retirement Tier 1 Exclusion in North Dakota 2026

Calculate your railroad retirement tier 1 exclusion 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
$1,198
Est. Total Savings
No Limit
Max Deduction
Above-the-Line
Deduction Type
23.9%
Combined Tax Rate

Railroad Retirement Tier 1 Exclusion Savings Calculator for North Dakota

$
$

Federal Savings

$1,100

22% bracket

North Dakota State

$98

1.95% rate

Total Savings

$1,198

23.9% combined

At a 23.9% combined tax rate in North Dakota, every $1,000 in deductions saves you $240 in taxes.

Savings by Tax Bracket in North Dakota

10%
$598
12%
$698
22%
$1,198
24%
$1,298
32%
$1,698
35%
$1,848
37%
$1,948

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

Eligibility Requirements

Railroad retirees receiving Tier 1 benefits equivalent to Social Security

  • 1Tier 1 benefits taxed like Social Security
  • 2Tier 2 benefits taxed as pension income
  • 3Same provisional income thresholds as Social Security

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

  • !Treating all railroad retirement as fully taxable
  • !Not applying Social Security taxation rules to Tier 1
  • !Missing state tax exclusions for railroad retirement
  • !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 RRB-1099Form RRB-1099-R

File these forms with your federal tax return to claim the railroad retirement tier 1 exclusion. North Dakota may require additional state-specific forms.

Other Tax Deductions in North Dakota

Traditional IRA Contribution

Retirement

~$1,677
est. savings

401(k) Contribution

Retirement

~$5,509
est. savings

SEP-IRA Contribution

Retirement

~$16,330
est. savings

Solo 401(k) Contribution

Retirement

~$19,595
est. savings

SIMPLE IRA Contribution

Retirement

~$3,832
est. savings

Retirement Savings Credit (Saver's Credit)

Retirement

~$500
est. savings

Roth IRA Conversion Strategy

Retirement

~$5,443
est. savings

Catch-Up Contributions (50+)

Retirement

~$1,796
est. savings

Railroad Retirement Tier 1 Exclusion in Neighboring States

Montana

5.9% top rate (flat)

~$3,805
+2,607 vs North Dakota

South Dakota

No state income tax

~$3,000
+1,802 vs North Dakota

Minnesota

9.85% top rate (progressive)

~$4,343
+3,145 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 Railroad Retirement Tier 1 Exclusion Guide

Frequently Asked Questions

How much can I save with the Railroad Retirement Tier 1 Exclusion in North Dakota?

In North Dakota, the railroad retirement tier 1 exclusion can save you an estimated $1,198 per year on a $5,000 deduction. This includes $1,100 in federal tax savings and $98 in North Dakota state tax savings at the 1.95% marginal rate. The national average savings is $3,000/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 Railroad Retirement Tier 1 Exclusion in North Dakota?

Railroad retirees receiving Tier 1 benefits equivalent to Social Security. The eligibility requirements are the same whether you live in North Dakota or another state, as this is a federal tax deduction. 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 Railroad Retirement Tier 1 Exclusion in North Dakota?

To claim the railroad retirement tier 1 exclusion, you need to file Form RRB-1099 and Form RRB-1099-R 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 Railroad Retirement Tier 1 Exclusion 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

Traditional IRA Contribution in North Dakota

Avg savings: $1,540/year

401(k) Contribution in North Dakota

Avg savings: $5,060/year

SEP-IRA Contribution in North Dakota

Avg savings: $15,000/year

Solo 401(k) Contribution in North Dakota

Avg savings: $18,000/year

SIMPLE IRA Contribution in North Dakota

Avg savings: $3,520/year

Retirement Savings Credit (Saver's Credit) in North Dakota

Avg savings: $500/year