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 (72.5 cents per mile through 30 June 2026, 76 cents from 1 July) is where the real money is, about $4,154 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 $11,138 mileage deduction is between $0 and $278 depending on bracket.

Where the Federal Savings Come From

At 15,000 business miles and the 2026 IRS rates (72.5 cents per mile through 30 June, 76 cents from 1 July, with half the miles in each half), the federal Schedule C deduction is $11,138. At a 22% federal bracket plus 15.3% self-employment tax, that's roughly $4,154 in combined federal savings. The state mileage deduction flows from the same federal Schedule C entry and lands as an additional $0 to $278 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 $278 depending on bracket on a $11,138 deduction). But the federal savings of about $4,154 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 76 cents per mile from 1 July 2026 (72.5 cents for trips before that) 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 $4,154 to $4,432 depending on state bracket. At 25,000 miles, roughly $6,924 to $7,388.

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