North Dakota Mileage Deduction 2026: Low Tax, Big Federal Savings

North Dakota's income tax tops out at 2.5%, with a 0% bracket below $47,150 (single filer). That's one of the lowest rates in the country. State savings on a mileage deduction are modest. The federal deduction at 72.5 cents per mile is where the real money is, about $4,056 at 15,000 business miles.

W-2 employee in ND? Your employer may owe you reimbursement under NDCC §34-02-01. See our North Dakota reimbursement guide.

ND Income Tax Brackets (Brief)

ND uses a graduated income tax for 2025 (single filer):

• 0% on income up to $47,150
• 1.95% on income from $47,151 to $232,475
• 2.5% on income above $232,475

For most filers at typical mileage-deductor income levels, the marginal state savings on a $10,875 mileage deduction is between $0 and $272 depending on bracket.

Where the Federal Savings Come From

At 15,000 business miles and the 2026 IRS rate of 72.5 cents per mile, the federal Schedule C deduction is $10,875. At a 22% federal bracket plus 15.3% self-employment tax, that's roughly $4,056 in combined federal savings. The state mileage deduction flows from the same federal Schedule C entry and lands as an additional $0 to $272 depending on your bracket.

ND's Driving Economy

ND has a small population but real mileage-heavy work:

• Bakken oil contractors driving personal trucks long distances between drill pads
• Agricultural contractors moving across the Red River Valley and beyond
• Home health aides in rural service areas where windshield time eats half the day
• Sales reps covering the eastern half of the state from Fargo or Bismarck

How to Claim

Self-employed: deduct on Schedule C, Line 9. ND starts with your federal taxable income, so the deduction flows through automatically. Keep a mileage log with the date, destination, purpose, and miles for each trip.

W-2 employees: no federal deduction is available. The mileage deduction for W-2 employees was permanently eliminated under the One Big Beautiful Bill. NDCC §34-02-01 may require your employer to reimburse you instead. See the reimbursement guide.

FAQ

Is the ND state deduction worth tracking for?

The state savings are modest ($0 to $272 depending on bracket on a $10,875 deduction). But the federal savings of about $4,056 are identical in every state. Track for the federal benefit. The state savings are a bonus.

What is the 2026 mileage rate in North Dakota?

The IRS rate of 72.5 cents per mile applies in ND as in every state. ND does not set its own rate.

Can W-2 employees deduct mileage in North Dakota?

No, not on a federal return. The deduction was permanently eliminated under the One Big Beautiful Bill. NDCC §34-02-01 may require your employer to reimburse you instead. See the reimbursement guide.

How much can a self-employed ND driver save?

At 15,000 business miles, roughly $4,056 to $4,328 depending on state bracket. At 25,000 miles, roughly $6,760 to $7,213.

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