Determination engine

Which state do you actually withhold in?

Reciprocity, convenience-of-the-employer, nonresident thresholds and unemployment localization, applied together to one employee's facts. Every answer cites the state source it came from.

Withhold North Dakota income tax.

Montana and North Dakota have a reciprocal agreement, so the work state stands down once the exemption certificate is on file.

Income tax withheld to

North Dakota

Graduated, top rate 2.5%

Employee certificate

MW-4

Montana Employee's Withholding Allowance and Exemption Certificate (North Dakota reciprocity exemption section; formerly Form MT-R)

Unemployment insurance

Montana

Localized under factor 1: Localization.

Reciprocal agreement

Yes

Montana exempts North Dakota residents.

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File MW-4 with the employer

Reciprocity is not automatic. Until the employee files MW-4 (Montana Employee's Withholding Allowance and Exemption Certificate (North Dakota reciprocity exemption section; formerly Form MT-R)) you are legally required to withhold Montana tax. Keep the signed form on file; it is not sent to the state.

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Withhold North Dakota income tax instead

Under the agreement the employee is taxed only by their state of residence. You will need a North Dakota withholding account.

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Employer registrations you will need

North Dakota — Income tax withholding: North Dakota Office of State Tax Commissioner
Montana — Unemployment insurance: Montana Department of Labor and Industry, Unemployment Insurance Division

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Get the form

MW-4 — Montana (official state source)

Montana profile North Dakota profile Full write-up for this pair

Change the inputs

Withholding determination

Answer six questions. The result is a shareable link, so you can paste it into a ticket or an email.

Employee lives inState of residence

Work is performed inWhere the employee physically sits

Employer is based inWhere the work is directed from

Days in the work stateThis calendar year, leave blank if unknown

Wages from work-state daysUS dollars, leave blank if unknown

Arrangement Works remotely rather than at an employer location Remote work is an employer necessity, not employee preference

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This is a determination aid, not advice. StateSide encodes published state rules and applies them mechanically to the facts you enter. It does not know your entity structure, your nexus history, your equity compensation, or the dozens of exceptions that turn a clean rule into a judgement call. Every determination cites the state source it came from — verify against that source, and take anything consequential to a payroll tax professional before you act on it.