Aberdeen Household Returns
Living in Aberdeen means filing no South Dakota income tax return, because the state does not tax personal income. Federal returns still need care, and the households of the Hub City have a mix of income that can make them complicated: farm and ranch income, wages from plants and hospitals, university salaries and scholarships, retirement income and, for some, wages earned in North Dakota. BOMCAS prepares personal returns for Aberdeen residents remotely and keeps each year consistent with the next.
For residency and the federal basics every South Dakotan shares, start with our South Dakota personal tax guide. This page turns to farm families, hospital and plant staff and North Dakota income.
Farm and Ranch Families
Farmers and ranchers around Aberdeen report on Schedule F and often have Form 4797 sales of breeding livestock and machinery. Key decisions each year include whether to defer grain sales or crop insurance proceeds to the following year, how to handle prepaid inputs, whether to use farm income averaging, and how much depreciation to take on new machinery. Patronage dividends from cooperatives such as Agtegra need to be reported correctly, and some patrons receive a pass-through deduction from the cooperative. Farm families with off-farm jobs also need to keep both sets of income in view when planning estimated payments.
Plant and Hospital Employees
Many Aberdeen households earn wages at 3M, Demkota Ranch Beef, Hub City and other plants, or at Avera St. Luke's and Sanford Aberdeen. Hourly workers with a lot of overtime may benefit from the federal deduction for qualified overtime pay for 2025 through 2028, which depends on what the employer reports. Employees of large companies may also hold shares through stock purchase plans, and selling those shares requires the correct cost basis. Health care workers who travel between clinics may have unreimbursed expenses, but most are no longer deductible for employees under current federal law.
Northern State Faculty, Staff and Students
University employees commonly contribute to the state pension and may also save through supplemental retirement plans. Students who work part time may still be dependants on their parents' returns, which affects who claims education credits. Scholarships used for tuition and required fees are generally tax-free, while amounts used for room and board are taxable. Student athletes with scholarships or name, image and likeness income should report that income properly; NIL payments are generally taxable and may be self-employment income.
Retirees
Retirees in Aberdeen enjoy South Dakota's lack of an income tax on pensions and retirement withdrawals, but Social Security, pension and IRA income still need to be planned federally. Required minimum distributions, qualified charitable distributions from IRAs and the timing of Roth conversions can all lower lifetime federal tax. Retirees who moved to Aberdeen from Minnesota, North Dakota or another state should check whether the former state has any claim on deferred income.
Working in North Dakota
An Aberdeen resident who works on jobs in North Dakota earns North Dakota-source income and must file a North Dakota nonresident return if they are required to file a federal return. North Dakota's 2026 rates start at 0 percent, so many workers owe little or nothing, but the return still has to be filed. North Dakota has reciprocity agreements with Minnesota and Montana, not South Dakota, so the rules apply normally. North Dakota residents who work in Aberdeen owe North Dakota tax on all of their income, including their Aberdeen wages.
Hunting Land and Rentals
Some Aberdeen families own land they lease to hunters during pheasant season, rent farmland to neighbours or own rental houses in town. Hunting leases and cash farm rent are usually reported as rental income, while crop-share arrangements may be treated differently. Rental houses need depreciation and records of repairs and improvements. Owners who provide lodging or guided hunts may be running a business instead, with sales and tourism tax to consider.
Getting Started
Upload your W-2s, 1099s, farm records, co-op notices, retirement statements and last year's return through our secure portal. We send one list of questions, prepare your federal return and any North Dakota or other state return, and walk through the results with you before e-filing.
Aberdeen Personal Tax Preparation Questions
Do Aberdeen residents pay state income tax?
Not to South Dakota, which has no personal income tax. If you earn income in North Dakota or another state that taxes income, you may need a nonresident return there.
I work some jobs in North Dakota. Do I file there?
If you must file a federal return and have North Dakota-source income, you generally must file a North Dakota nonresident return, even if the tax owed is small or zero.
How do farm families use income averaging?
Farmers can elect to spread part of a high-income year's farm income over the previous three years' brackets on Schedule J, which can reduce the total federal tax.
Are Northern State scholarships taxable?
Scholarships used for tuition, required fees and course materials are generally tax-free. Amounts used for room, board or travel are taxable.
Talk to BOMCAS About Personal Tax Preparation in Aberdeen
Farm families and owners often need their entity returns finished first, built from up-to-date books. Households paying a nanny or farm hand can use our payroll service, and land transfers or retirement decisions belong in planning. Missing years can go through late filing; anyone renting a lodge or guiding hunts should check sales and tourism tax, and Canadians or families moving north can read about Canada–U.S. tax. Across South Dakota, we also explain business returns, sales tax, bookkeeping, payroll, planning, back taxes and Canada–U.S. tax on our state pages, which start from the South Dakota overview.
Tell us a little about your Aberdeen business or household and BOMCAS will reply with next steps and what we need to quote. Reach us through the contact page or the form below, by phone at 780-667-5250 or by email at info@bomcas.ca. You can also go back to the Aberdeen overview to compare services. This page is general information and is not advice for your own situation.