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TJ Jerke, Forum News Service, Published July 01 2013

North Dakotans to start seeing income tax relief

BISMARCK – North Dakotans should start seeing fewer dollars coming out of their paychecks, the state Tax Department said Monday.

The department released newly updated state income tax withholding rates for employers and estimated tax forms for individuals, estates, and trusts. The new rates show the 19.3 percent across-the-board cut in individual income tax rates that came after the state Legislature passed out $200 million worth of income tax relief.

The Legislature knocked down the rates of the five individual income tax brackets. The highest bracket dropped from 3.9 to 3.2 percent, the middle bracket dropped from 3.13 to 2.52 and the lowest bracket fell to 1.22 percent from 1.5 percent.

Kathy Strombeck, director of research and communications for the Tax Department, said a single person making $3,000 a month will see a drop in what their employer takes out of their paycheck for income taxes from $36 to $29, a $7 savings in withholding per month.

“It’s not going to be a significant amount, but it’s still tax relief that will be meaningful to taxpayers out there in the long run,” Tax Commissioner Cory Fong said.

The new rates apply for all of 2013, but Fong strongly encourages employers not to backtrack and apply the new withholding numbers to previously issued paychecks.

But employers should use the new figures when calculating payroll for the rest of the year. Wage earners who had their withholding set under the previous rates for the first half of the year may see a larger refund once taxes are filed.