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All Military Pay Untaxed Since 2023 — Including Bonuses and Training Pay

Since 2023 North Dakota has deducted ALL military pay from state taxable income for resident members of the armed forces on federal active duty, National Guard members and Reserve members. The breadth is the point: it covers federal pay for TRAINING, EDUCATION, MOBILIZATION AND BONUSES, as well as state pay on state active duty. Most states that exempt military pay stop at active duty and leave drill and bonus pay taxable. The state put the saving to its members at about $4 million over the 2023-25 biennium.

Verified August 27, 2026

What this benefit is

Since 2023 North Dakota has deducted ALL military pay from state taxable income for resident members of the armed forces on federal active duty, National Guard members and Reserve members. The breadth is the point: it covers federal pay for TRAINING, EDUCATION, MOBILIZATION AND BONUSES, as well as state pay on state active duty. Most states that exempt military pay stop at active duty and leave drill and bonus pay taxable. The state put the saving to its members at about $4 million over the 2023-25 biennium.

What it's worth: All military pay deducted from North Dakota taxable income

  • ALL MILITARY PAY is deducted, for ND-resident members of the armed forces on federal active duty, National Guard members and Reserve members.
  • It covers federal pay for TRAINING, EDUCATION, MOBILIZATION AND BONUSES.
  • It also covers STATE PAY on state active duty.
  • Most states that exempt military pay leave drill and bonus pay taxable. North Dakota does not.
  • IN FORCE SINCE 2023.
  • The state estimated about $4 million saved by its members over the 2023-25 biennium.
  • The saving depends on your pay and North Dakota's rates.

Who is entitled to it

  • You serve in the U.S. armed forces.
  • You are receiving military pay.
  • North Dakota income tax.

Not sure whether that describes you?

Answer a few questions about this benefit specifically — we only ask what this one actually depends on, and we stop as soon as we know.

How to claim it

Deadline: With the annual North Dakota return
  1. 1Deduct the military pay on your North Dakota return.
  2. 2Include DRILL, TRAINING AND BONUS pay. Those are inside this deduction even though they are outside most states'.
  3. 3Guard members should include state active duty pay in support of a defined operational mission.
  4. 4If you filed for 2023 or later without the deduction, ask the Tax Commissioner about amending.
  5. 5Keep the Leave and Earnings Statements to separate military pay from anything civilian.
Form
North Dakota individual income tax return
File with
ND Office of State Tax Commissioner
Annual
Claimed once a year.
Worth knowingA Guard member who has been paying North Dakota tax on drill pay since 2023 should check. That is the part most people assume is still taxable.

Sources

This finder provides an informational match, not a government eligibility determination. The responsible agency decides your application.