Montana has an income tax reciprocity agreement with the state of North Dakota which provides that a resident of one state may elect to be exempt from wage withholding and individual income tax on compensation received for work performed in the other state.
If you are a resident of North Dakota, wages you received in 2019 for work performed in Montana are not taxable in Montana.
The following instructions are for residents of North Dakota whose income from Montana is only wages. If your employer withheld Montana income tax you must complete Form 2, page 1 to request the refund as follows:
1. Complete the personal information section at the top of page 1, as instructed.
2. File this form as a nonresident,
3. Mark the box for “North Dakota Reciprocity.”
4. Leave the dependents and exemptions sections blank.
5. Enter the Federal Adjusted Gross Income shown on your federal Form 1040 on line 7.
6. Fill in the amount of the Montana income tax withheld from your wages on line 17, and also include this amount on lines 21, 22 and 23.
7. File this form with a copy of your federal return and Form(s) W-2 showing Montana income tax withholding.
If you received wages and other types of income from Montana, you must complete Form 2 following the instructions. See the Nonresident/Part-Year Resident Ratio instructions for the treatment of your wages.
If you do not want your employer to withhold Montana income tax from your wages, you must claim the North Dakota reciprocity exemption on Montana Form MW-4 and give that form to your employer.