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INCOME TAX SB 2282 - INCOME TAX CREDIT FOR EMPLOYER PROVIDED CHILD CARE PAYMENTS Beginning with tax year 2025, the bill established a new income tax credit for employer provided child care payments. The income tax credit is available to any taxpayer that is an employer and may be earned by employer payments made directly to child care facilities or to employees for reimbursement of their child care costs for qualied child care. The general provisions for the tax credit program are:• The tax credit is equal to 50% of an employer’saggregate qualied child care paymentsmade during the tax year.• The tax credit is available for the rst $1,000of payments to or attributable to eachemployee.• The employer must provide an equalopportunity for all its employees with child carecosts to participate.• Qualied payments include those made tochild care facilities licensed in North Dakotaand payments to licensed facilities locatedwithin ten miles of North Dakota.• There is no limit on the amount of tax creditthat may be earned for any tax year.• The credit is nonrefundable and any creditearned in excess of a taxpayer’s tax liabilitymay not be carried over to succeeding taxyears.• The tax credit is available to corporations,individuals, estates, trusts, and passthroughentities.• A tax credit earned by a passthrough entity ispassed through and allowed to each ownerin proportion to their respective interests in thepassthrough entity.STATUTE AFFECTEDCreated new section to N.D.C.C. ch. 57-38 and amended N.D.C.C. §57-38-30.3. EFFECTIVE DATETaxable years beginning after December 31, 2024 INCOME TAX CREDIT LEGISLATION SB 2038 - DISCLOSURE OF TAX INCENTIVE INFORMATION Senate Bill 2038 amends existing law to require that the Ofce of State Tax Commissioner disclose the amount of any tax exemption granted to a taxpayer to the legislative management chairman or a chairman of legislative standing committee upon request. The bill expands the existing law which provides for similar disclosures related to tax credits and deductions claimed. The law does not allow the Tax Commissioner to disclose the taxpayer’s name or any other information that is restricted under N.D.C.C. Title 57.STATUTE AFFECTEDN.D.C.C. § 57-01-02(17)EFFECTIVE DATETax incentives claimed or granted after December 31, 20241The following are highlights of income tax legislation approved by the 2025 Legislative Assembly and signed into law by Governor Kelly Armstrong.

INCOME TAX H.R. 1 - ONE BIG BEAUTIFUL BILL ACT On July 4, 2025, President Donald Trump signed into law the budget reconciliation bill from the House of Representatives (H.R.) One Big Beautiful Bill Act, which included several federal income tax provisions. One signicant issue addressed was making permanent many of the prior changes of the Tax Cuts and Jobs Act of 2017, which were previously set to expire after tax year 2025. New individual income tax changes include partial exclusions or deductions for tip income, overtime pay, car loan interest, and charitable contributions. There were also changes to standard deductions, various itemized deductions, and child tax credits. Some of the new changes are retroactive to 2025, with some being permanent and other provisions expiring after year 2028.The starting point for computing North Dakota income taxes is automatically tied to the computation of federal taxable income. Therefore, any federal changes to income or deductions automatically ow through and similarly impact the computation of North Dakota taxable income. Changes to federal tax credits do not have any direct impact on the computation of North Dakota taxable income.While the computation of North Dakota taxable income is tied to the federal computation, existing North Dakota individual income tax rates and brackets are set in North Dakota law and for 2025 remain unchanged as published last year. The annual indexing of individual income tax brackets and income tax withholding tables applicable for 2026 will be published in November when the federal ination information becomes available.STATUTE AFFECTEDEnacted by the Senate and House of Representatives and 119th Congress of the United States of America Public Law (PL) 119-21.EFFECTIVE DATETaxable years beginning after December 31, 2024 and 2025FEDERAL TAX LAW CHANGES 2

WITHHOLDING TAXSB 2047 - WITHHOLDING EXEMPTION FOR  MILITARY PAYBeginning with tax year 2026, income from militarypay that qualifies for the military pay deduction(found in N.D.C.C. § 57-38-30.3, subsection 2,subdivision g) is no longer subject to North Dakotaincome tax withholding provisions. If a taxpayerwishes to have withholding deducted from theexempt pay, they can instruct the employer to  do so. STATUTE AFFECTEDN.D.C.C. § 57-38-59EFFECTIVE DATETaxable years beginning after December 31, 2025WITHHOLDING EXEMPTIONLEGISLATION3