Which State does Montana have a Reciprocal Agreement with?

Montana and North Dakota have a reciprocal agreement. If a Montana resident works or performs personal/professional services for an employer in North Dakota, the wages are treated as being earned in Montana and the Montana resident does not have to file a North Dakota income tax return reporting those wages. 

What if the employer withheld North Dakota tax?

If the employer withheld North Dakota tax in error, file a nonresident North Dakota return to receive a refund of those withholdings. The taxpayer cannot claim a credit for taxes paid to another state on their return.

 

Do I need to file a nonresident return for the reciprocal state?

If a Montana resident erroneously had income tax withheld for North Dakota on salaries and wages earned there, a nonresident return for the reciprocal state will need to be filed to get a refund of the taxes withheld.

• Add the North Dakota Nonresident Return
• Select Montana from the list of states
• Select where the majority of income was earned

To claim exempt from future withholdings, file form NDW-R with the taxpayers employer. 

Additional Information:
Montana State Tax Information

Montana Resident Return Instructions