by Bismarck, North Dakota – North Dakota seniors over the age of 65 have access to an extra standard deduction, a valuable tax benefit designed to reduce their taxable income and ease the financial burden during retirement. For those living on a fixed income, such as Social Security or pension benefits, understanding this deduction is essential to plan effectively for annual taxes and maximize savings under state law.
What Is the Extra Standard Deduction?
The extra standard deduction is an additional deduction available for North Dakota residents who are seniors or legally blind. It is applied on top of the regular standard deduction, directly reducing taxable income. For seniors, this deduction can result in meaningful tax savings, helping stretch retirement dollars further and offset costs like healthcare and utilities.
How Much Is the Extra Deduction?
For the 2025 tax year, the North Dakota extra standard deduction for seniors over 65 is $1,950 for single filers and $1,650 for each spouse when filing jointly. These amounts are adjusted periodically to account for inflation and changes in the cost of living. For example, a single senior with a taxable income of $30,000 could reduce it to $28,050 by claiming this extra deduction, potentially saving hundreds of dollars in state income tax.
Eligibility Requirements
To qualify for this deduction in North Dakota:
- You must be 65 years or older by the end of the tax year.
- The deduction applies regardless of your income level, making it accessible to most seniors.
- Seniors who are legally blind can also claim the extra deduction, even if under 65.
How to Claim the Deduction
Claiming the extra standard deduction is straightforward:
- Complete your North Dakota state income tax return (Form 40).
- Enter the regular standard deduction first.
- Add the extra standard deduction for seniors over 65 in the designated section.
- Verify all personal details, including age and filing status, to prevent processing delays.
Many seniors choose to consult a tax professional or use tax preparation software to ensure they maximize all eligible deductions.
Read Also: Understanding the Nebraska Extra Standard Deduction for Seniors Over 65
Benefits of the Extra Deduction
The extra standard deduction provides several advantages:
- Lower Taxable Income: Reduces the portion of income subject to state taxes.
- Increased Refund Potential: Seniors who had taxes withheld may see a larger refund.
- Simple to Claim: No complex paperwork is required.
- Financial Relief: Particularly helpful for seniors living on a fixed income, offsetting essential living costs.
Real-Life Example
Consider a married couple, both over 65, with a combined taxable income of $50,000. With the extra standard deduction, they could deduct an additional $3,300 from their income ($1,650 per spouse), reducing their taxable income to $46,700. This simple adjustment could lower their tax liability by several hundred dollars, freeing up money for healthcare, utilities, or leisure activities.
Comparison With Other States
While North Dakota provides this specific deduction, states vary in their approach to supporting seniors:
- States like Illinois and Missouri offer additional exemptions for retirees.
- States such as Florida and Texas have no state income tax, making extra deductions unnecessary.
Seniors living in North Dakota or planning to move should review these rules annually to ensure they claim all benefits available.
Planning Tips for Seniors
- Track birth dates and spousal ages for eligibility.
- Review state tax forms each year, as deduction amounts may change.
- Consider tax planning strategies, such as timing withdrawals from retirement accounts to maximize deductions.
Are you a North Dakota senior planning your taxes this year? Have you used the extra standard deduction before, or do you need guidance? Share your experiences in the comments at ibwhsmag.com and join the discussion on maximizing tax savings for seniors.
