North Dakota Homestead Property Tax Credit

Quick Facts

• Dual programs: North Dakota offers both a property tax credit for homeowners and a renter’s refund program for qualifying seniors and disabled residents. Each uses the same income thresholds and application.
• Benefit amounts: Homeowners can receive a credit covering up to $9,000 of taxable value (reducing taxes by roughly $405 depending on mill rates). Renters may receive refunds up to $400 based on 20% of annual rent exceeding income thresholds.
• Income and asset considerations: Household income includes Social Security, pensions, interest, dividends, capital gains, and imputed income from certain assets. Applicants must list assets because the state converts a percentage of asset value into income for eligibility calculations.
• Local administration: Applications are filed with county social service or tax equalization offices, which verify eligibility and forward approvals to the Tax Commissioner.

Program Overview

The Homestead Property Tax Credit is codified in North Dakota Century Code Chapter 57-02.1. It is designed to help homeowners and renters maintain housing stability despite rising property taxes or rents. The credit targets seniors 65 and older and persons with permanent total disability, reflecting the state’s commitment to supporting residents on fixed incomes in both urban centers like Fargo and rural communities across the prairie.

The homeowner credit reduces the property’s taxable value. For example, a $100,000 home with a $9,000 credit pays tax on $91,000 instead of the full amount. Counties receive state reimbursements to offset lost revenue, ensuring local services remain funded. Renters receive a refund paid directly to them, functioning like a circuit breaker for rent burdens. Because North Dakota winters can bring high heating costs, the credit often frees funds for essential utilities or home repairs.

Eligibility Requirements

To qualify you must:

1. Meet age/disability criteria: Be 65 or older, or permanently and totally disabled. Disability must be certified by the Social Security Administration, Veterans Affairs, or a licensed physician using state forms.
2. Reside in North Dakota for the entire year. The home or rental unit must be your primary residence as of the preceding year (January 1).
3. Meet income limits: Total combined income of the applicant and spouse must be $70,000 or less. Income includes wages, pensions, Social Security, business income, interest, dividends, capital gains, and 15% of the fair market value of assets exceeding $500,000 (the asset allowance). Certain medical expenses paid out of pocket can reduce income.
4. Property ownership: Homeowners must have owned the property on December 31 of the year prior to the application. Mobile homes qualify if taxed as real property. Renters must have paid rent on a taxable property.
5. File timely application: Submit the application to the county by March 31 for the current tax year. Some counties extend to May 1, but earlier filing ensures timely credits.

Benefit Details

• Homeowners: The credit tiers range from 100% reduction of the first $9,000 taxable value for incomes up to $40,000 to smaller credits for incomes between $40,001 and $70,000. Counties apply the credit directly to property tax bills.
• Renters: Eligible renters receive a refund equal to 20% of annual rent minus 4% of household income, capped at $400. Refunds arrive as checks from the state.
• Asset imputation: For assets exceeding $500,000 (excluding the home and essential household items), the state imputes income by taking 5% of the excess value and adding it to household income. This prevents high-asset households from qualifying solely due to low taxable income.
• Medical deduction: Out-of-pocket medical expenses (excluding premiums) paid in the prior year can be deducted from income, increasing eligibility. Keep receipts for prescriptions, eyeglasses, and long-term care costs.

Application Process

1. Obtain the application form. Available from county social service/tax offices or the state tax website. Form includes sections for income, assets, property information, and medical deductions.
2. Compile income documentation. Gather federal tax returns, SSA-1099s, 1099-Rs, bank statements, brokerage summaries, and any other income proofs. Include documentation for non-taxable income.
3. List assets. Provide account balances, vehicle values, secondary properties, and other investments. Identify any assets exceeding the $500,000 allowance.
4. Document medical expenses. Save receipts for prescription medications, dental work, hearing aids, and other qualified expenses paid out of pocket.
5. For renters: Obtain a landlord certification verifying rent paid and that the property is subject to property tax. Mobile home park residents should submit statements showing lot rent and confirmation of taxation.
6. Submit to county office. File by March 31. Counties may require in-person signatures or notarization. Request a receipt.
7. Await determination. The county forwards approved applications to the state, which processes homeowner credits and issues renter refunds. Monitor tax bills or bank accounts to confirm receipt.

Documentation Checklist

• Completed North Dakota Homestead Credit application
• Federal income tax return (Form 1040) and schedules
• SSA-1099, pension statements, W-2s, interest/dividend statements
• Bank and investment account summaries as of December 31
• Property tax statements or rent receipts
• Medical expense receipts and summaries
• Disability certification, if applicable
• Landlord verification form for renters

Strategies for Maximizing Relief

1. Time asset withdrawals. Large IRA distributions can raise income above the threshold. Spread withdrawals or use qualified charitable distributions to manage taxable income.
2. Track medical expenses meticulously. Deductible expenses reduce income. Keep a log throughout the year to avoid missing eligible costs.
3. Appeal property assessments. If your home’s taxable value rises sharply, file an appeal during the local equalization meeting. Lowering the taxable base can enhance the credit’s effectiveness.
4. Coordinate with fuel assistance. Use savings to winterize homes through the State Weatherization Assistance Program, reducing heating bills and preserving the value of the credit.
5. Leverage outreach programs. Senior centers and AARP tax prep volunteers host clinics each February and March. Attending ensures forms are accurate and submitted on time.

Example Scenarios

• Homeowner in Bismarck: Ellen, age 72, has $32,000 combined income and $200,000 home value. She qualifies for the full $9,000 credit, reducing her taxable value and saving about $405 annually. She uses the savings to cover rising prescription costs.
• Farmer in Grand Forks County: Ray and his wife, both 68, have $55,000 income and $100,000 in non-farm investments plus farmland. Because farmland used in the operation is exempt from the asset test, they still qualify for a partial credit that reduces taxes by $250.
• Renter in Minot: Sheila, age 66 and disabled, pays $700 monthly rent. With $18,000 income, her refund equals 20% of $8,400 ($1,680) minus $720 (4% of income), capped at $400. She receives the full refund, which she applies to utility bills.

Maintaining Eligibility

• Annual application: You must reapply each year. Income and asset levels may change, affecting credit amounts.
• Report ownership changes: If you sell, transfer, or significantly remodel the property, notify the county. Credits do not transfer automatically to new owners.
• Keep records for audit: Retain income and medical documentation for at least three years. The Tax Commissioner conducts random audits.
• Monitor deadlines: Mark calendar reminders each January to start gathering documents. County offices become busy in March; earlier submission avoids delays.

Additional Resources

• North Dakota Homestead Property Tax Credit
• County social service or tax equalization offices for application assistance
• AARP Tax-Aide locations for free preparation
• North Dakota Department of Human Services for related energy assistance programs

Key Takeaways

North Dakota’s Homestead Property Tax Credit offers significant relief to seniors and disabled residents coping with property tax or rent burdens. By assembling thorough documentation, tracking medical deductions, and applying annually, you can secure credits that make it easier to remain in your home or rental unit despite economic pressures.