TIN ComplianceA resource from TIN Comply
Backup withholding
No
Nonresident payments
Yes, 2.50%
Threshold
$600
Forms
RWT-941, RWT-1096
State withholding

North Dakota backup withholding and nonresident contractor withholding

North Dakota withholds on oil and gas royalties paid to nonresidents. N.D.C.C. 57-38-59.4 requires a remitter to withhold 1.75 percent of gross North Dakota royalties paid to nonresident individuals and entities not domiciled in the state (the top individual rate of 2.50 percent minus 0.75 percent), with quarterly payments under $600 exempt and small producers excused. The Tax Commissioner’s web page carries the current rate; the 2017 guideline PDF still shows 2.15 percent. Returns are Form RWT-941 quarterly and Form RWT-1096 annually. No backup withholding or nonresident contractor rule was found.

State backup withholding not requiredNonresident non-wage withholding requiredSources checked November 1, 2026Updated November 1, 2026
In this guide
  1. Status
  2. Withholding on non-wage payments to nonresidents
  3. What North Dakota does not require
  4. Pass-through entity withholding
  5. From the source
  6. What to confirm
  7. Sources

Status

State backup withholdingNot required (inferred)

Inferred: no provision found in the saved statute or guide

Non-wage payments to nonresidentsRequired

Primary source (statute, regulation or agency publication saved in full)

Federal backup withholding under IRC 3406 (24 percent on a missing or mismatched TIN) applies in North Dakota exactly as everywhere else; this page covers only what the state adds. The 50-state tables put North Dakota next to its neighbours, and the North Dakota 1099 filing page covers whether the state wants its own copy of the 1099.

Withholding on non-wage payments to nonresidents

Applies to
Oil and gas royalties only: remitters paying North Dakota oil or gas royalties to nonresident individuals and non-North Dakota domiciled business entities (including nonresident aliens even if treaty-exempt federally). No general nonresident contractor or entertainer withholding.
Threshold
No withholding on quarterly payments under $600, or on other-frequency payments that annualize to under $1,000
Rate
Highest individual rate (2.50%) minus 0.75% = 1.75% of the gross royalty (Box 2 of 1099-MISC/1042-S)
Statute
N.D.C.C. 57-38-59.4; OSTC guideline Income Tax Withholding from Oil and Gas Royalty Payments
Withholding return
Form RWT-941 (Royalty Withholding Return) quarterly via ND TAP; monthly option
Exemption certificate or waiver
Form RWT-EXM for publicly traded partnerships and tax-exempt organizations; small producer exception reported on RWT-1096
Payee statement
Federal or state-only Form 1099-MISC / 1042-S; Form RWT-1096 annual reconciliation (electronic)
Due dates
RWT-941 quarterly (April 30, July 31, October 31, January 31); RWT-1096 with 1099s annually
Exceptions
Producers under 350,000 barrels of oil or 500 million cubic feet of gas in the prior year (must still file RWT-1096); payments to US, state and political subdivisions; tribal on-reservation production; publicly traded partnerships and 57-38-09 exempt organizations (RWT-EXM); ND residents and ND-domiciled entities

What North Dakota does not require

State backup withholding

No state backup withholding: N.D.C.C. 57-38-59 (wage withholding); Income Tax Withholding and Information Returns guideline has no backup-withholding rule

Basis: Inferred: no provision found in the saved statute or guide.

Pass-through entity withholding (out of scope)

North Dakota requires pass-through entities to withhold for nonresident owners (57-38-31.1; Form PWA/Schedule K-1). Entity-level withholding on distributions to nonresident owners is a duty of the entity, not of a payer, and is not covered on this page.

From the source

“The highest individual income tax rate is 2.50%, resulting in a withholding tax rate of 1.75%”

North Dakota Office of State Tax Commissioner, Royalty Withholding, read November 1, 2026

What to confirm

  • The web page carries the current rate (1.75 percent); the 2017 guideline PDF still shows 2.15 percent, computed from the earlier 2.90 percent top rate.

Sources

Each source below was read and saved on November 1, 2026; the page is built from the saved text. Statutes are cited to the section; department pages and publications to their title and, where shown, revision date.

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