New Hampshire does not have a state income tax on wages or salaries
New Hampshire is one of nine states with no tax on earned income. You will not owe state income tax on wages, salary, tips, or self-employment income, no matter how much you earn. This applies whether you live in New Hampshire full-time, work there but live elsewhere, or live there but work out of state.
The state does tax interest and dividend income at 5 percent, but only on amounts above $2,400 per person per year (or $3,600 for married couples filing jointly). Most working people never reach that threshold and pay nothing. New Hampshire also has no sales tax and no estate tax, making it one of the lowest-tax states overall.
Key Takeaways
- New Hampshire residents pay no state income tax on wages, salaries, or self-employment income, regardless of how much they earn.
- Interest and dividend income is taxed at 5 percent, but only on amounts above $2,400 per person per year ($3,600 for married couples).
- If you work in New Hampshire but live in another state, you owe no New Hampshire income tax on your wages.
- If you live in New Hampshire but work in a state with income tax, you may owe tax to that state, not to New Hampshire.
- New Hampshire has no sales tax or estate tax, so income tax is the only major state tax you will not pay there.
How the interest and dividend tax works in practice
The 5 percent tax on interest and dividends applies only to the amount above the annual threshold. If you are single and earn $3,000 in dividend income, only $600 is taxable ($3,000 minus the $2,400 threshold). You would owe $30 in state tax on that amount.
This tax is reported on the New Hampshire Form DP-10, which you file with the state Department of Revenue Administration. Most people with interest or dividend income below the threshold do not need to file at all. If you have investment accounts, savings accounts, or stock holdings, check your year-end statements to see whether your total interest and dividends exceed the threshold for your filing status.
What happens if you work in New Hampshire but live elsewhere
If you cross state lines for work, New Hampshire will not tax your wages. You owe income tax only to the state where you live. If you live in Massachusetts, Vermont, or Maine and work in New Hampshire, you file and pay income tax to your home state, not to New Hampshire.
Your employer in New Hampshire will not withhold state income tax from your paycheck because there is no state income tax to withhold. This means your take-home pay is higher than it would be in a state with income tax, but you are responsible for understanding your home state's tax obligations. Some states with income tax have reciprocal agreements with New Hampshire, but the rule is simple: you owe tax to the state where you live.
What happens if you live in New Hampshire but work elsewhere
If you live in New Hampshire and work in a state with income tax — such as Massachusetts, Connecticut, or New York — you owe income tax to that state, not to New Hampshire. Your employer will withhold that state's income tax from your paycheck. New Hampshire will not tax your wages because it has no income tax.
You will file a tax return in the state where you work and report your wages there. You will also file a federal return. You do not file a New Hampshire income tax return on wages. However, if you have interest or dividend income above the threshold, you may still owe the 5 percent New Hampshire tax on that investment income.
How New Hampshire funds state services without income tax
New Hampshire relies on property tax, business taxes, and other revenue sources instead of income tax. Property tax rates are among the highest in the nation to compensate. The state also taxes business profits, meals and rooms (a limited sales tax on restaurants and lodging), and tobacco and alcohol.
This tax structure means New Hampshire homeowners typically pay more in property tax than residents of states with income tax. Renters do not pay property tax directly, but landlords pass some of that cost along in rent. The trade-off is that wage earners keep more of their paychecks, which can offset higher property costs for some households.
Filing requirements if you have investment income
You must file a New Hampshire Form DP-10 if your interest and dividend income exceeds the threshold for your filing status. The deadline is the same as the federal deadline, usually April 15. You can file online through the Department of Revenue Administration website or by mail.
If you have no interest or dividend income, or if your total is below the threshold, you do not need to file a state return. You still file your federal return as usual. Keep records of all interest and dividend statements from banks, investment firms, and brokers in case the state requests documentation.
Frequently Asked Questions
Do I have to file a New Hampshire tax return if I only have wage income?
No. If your only income is wages or salary and you live in New Hampshire, you do not file a state return. New Hampshire has no income tax on wages. You file only your federal return.
What if I moved to New Hampshire mid-year from another state?
You owe income tax to your previous state only for the months you lived there. Your new employer in New Hampshire will not withhold state income tax. Contact your former state's tax agency to report your move and determine whether you owe a part-year return.
Are retirement income and Social Security taxed in New Hampshire?
No. New Hampshire does not tax Social Security, pensions, retirement account withdrawals, or other retirement income. This is one reason many retirees move to the state.
If I have a side business, do I owe New Hampshire income tax?
No income tax on the profit itself, but New Hampshire does tax business income at the entity level through its Business Profits Tax and Business Enterprise Tax. Self-employed individuals should consult a tax professional about these obligations, which differ from personal income tax.
What if I inherit money or receive a large gift?
New Hampshire has no estate tax or inheritance tax, and gifts are not taxed. You do not owe state tax on money you inherit or receive as a gift. However, if the inherited assets generate interest or dividends above the threshold, that investment income is taxed at 5 percent.