Capital Gains Tax for North Dakota (2026)
North Dakota (ND) Key Facts
State Capital Gains Rate
1.95%
Taxed As
Ordinary income
Federal Rate Applies
Yes (0%, 15%, or 20%)
Long Term vs Short Term
Both taxed at state level
How This Calculator Works in North Dakota
This calculator estimates your combined federal and North Dakota capital gains tax. Enter your gain amount, holding period, and income to see your estimated tax.
North Dakota Overview
North Dakota taxes capital gains as ordinary income, but the low top rate of 1.95% makes it one of the lowest-tax states for investors. Federal capital gains taxes also apply, with long-term rates of 0%, 15%, or 20% depending on income. The combined state and federal burden should be considered when planning asset sales or investment strategies.
How North Dakota Compares
North Dakota's capital gains rate of 1.95% compares to Minnesota at 9.85% and South Dakota at 0%. State capital gains taxes significantly impact net investment returns.
| State | Top Rate | Notes |
|---|---|---|
| Minnesota | 9.85% | Minnesota has a capital gains rate of 9.85%. |
| South Dakota | 0% | South Dakota has a capital gains rate of 0%. |
| Montana | 6.75% | Montana has a capital gains rate of 6.75%. |
North Dakota's capital gains rate of 1.95% compares to a national average of approximately 5.04%. This is below the national average.
Tips for North Dakota Residents
- 1North Dakota taxes capital gains as ordinary income, but the low top rate of 1.95% makes it one of the lowest-tax states for investors.
- 2Federal long-term gains (held 1+ year) are taxed at 0%, 15%, or 20%. North Dakota's state tax applies on top of the federal rate.
- 3Hold investments over one year to qualify for lower federal long-term rates rather than ordinary income rates.
- 4Tax-loss harvesting—selling losing investments to offset gains—reduces both federal and North Dakota state capital gains tax.
- 5Consider the combined federal + state rate when planning large asset sales. The total can exceed 25.8% for high earners.