BISMARCK – Employees could see their state income tax withholding change due to a tax reduction approved by the 2023 Legislature.

Tax Commissioner Brian Kroshus recently released the updated North Dakota income tax withholding rates and instructions booklet for employers. The revised estimated tax forms for individuals, estates and trusts and fiduciary estimated payments also were released.

“The new withholding and estimated tax forms are a result of House Bill 1158, the bill that provides the largest individual income tax relief package in state history,” Kroshus said. “The bill allows everyday citizens, across all tax brackets, to keep more of their hard-earned money.”

HB 1158 will provide $358 million in individual income tax relief by zeroing out the state’s bottom tax bracket and combining the top four brackets into two brackets with reduced tax rates.

The changes will result in an estimated $104 million in savings for the zeroed-out bottom bracket, $178 million in savings for the combined middle-income brackets and $76 million in savings for the combined top brackets over the next two years.

Employers are not required to adjust the state withholding for paychecks issued after the release of the updated information. However, Kroshus encourages employers to use the revised withholding tables going forward for the remainder of 2023.

“Taxpayers making estimated tax payments may also adjust their payment amount based on the new reduced tax rates,” Kroshus said.