New Hampshire does not have a state income tax on wages or salaries

New Hampshire is one of nine states with no income tax on wages. If you work and earn a paycheck, you do not owe state income tax to New Hampshire on that money. Federal income tax still applies — that comes out of your paycheck — but the state itself does not collect income tax from employment.

This is a permanent feature of New Hampshire law, not a temporary exemption. The state has structured its budget and tax system around other revenue sources, mainly the Business Profits Tax (on corporate earnings) and the Business Enterprise Tax (on gross receipts). Property taxes and sales taxes also fund state and local services.

Key Takeaways

  • New Hampshire does not tax wages, salaries, or tips from employment, so you will not owe state income tax on your paycheck.
  • Interest and dividend income is taxed by New Hampshire at 5 percent, even though wages are not.
  • You still file federal income tax returns; the lack of state income tax does not affect your federal obligations.
  • If you move to New Hampshire from another state, you do not owe back taxes on wages you earned while living there.
  • Retirement income such as Social Security and pensions is not taxed by New Hampshire.

What types of income New Hampshire does tax

Although New Hampshire does not tax wages, it does tax certain other types of income. The state levies a 5 percent tax on interest and dividend income — money you earn from savings accounts, bonds, stocks, and mutual funds. This applies to residents only; if you live in New Hampshire and have investment accounts, the interest and dividends are subject to state tax.

The threshold matters: you only owe tax on interest and dividends if your total income from those sources exceeds $2,400 in a year (as of the current tax year; this amount can change). Below that threshold, you owe nothing. Above it, the 5 percent rate applies to the entire amount, not just the portion over $2,400.

Retirement income — including Social Security, pensions, and distributions from retirement accounts — is not taxed by New Hampshire. This is one reason the state appeals to retirees. If you are receiving a pension or Social Security, you do not report it to the state tax authority.

Who has to file a New Hampshire tax return

You must file a New Hampshire tax return if you are a resident and your interest and dividend income exceeds $2,400 in the tax year. Residents are people who live in the state for more than six months of the year or maintain a permanent home there.

If your interest and dividend income is below $2,400, you do not have to file a state return. If you have only wage income, you do not file a state return at all, even if you earned a large salary — the state does not tax it.

Non-residents who earn interest or dividend income from New Hampshire sources may also have filing obligations, depending on the amount and the type of income. This is less common but can apply if you own property or investments in the state.

How to report interest and dividend income

If you owe New Hampshire tax on interest and dividends, you file using Form NH-1040, the state's individual income tax return. You will need records of all interest and dividend payments you received during the year. Banks and investment firms send these to you on 1099 forms (1099-INT for interest, 1099-DIV for dividends) by January 31 each year.

The filing deadline is the same as the federal deadline: April 15, unless that date falls on a weekend or holiday. You can file by mail or electronically through the New Hampshire Department of Revenue Administration website. If you use a tax preparer, they can handle the state return along with your federal return.

If you do not receive a 1099 form but earned interest or dividends, you are still responsible for reporting the income. Keep statements from your bank or investment account as proof of what you earned.

Moving to or from New Hampshire and state income tax

If you move to New Hampshire from a state that has income tax, you do not owe back taxes to New Hampshire on wages you earned before moving. Your tax obligation to your former state ends when you establish residency in New Hampshire, which typically means registering to vote, getting a driver's license, or renting or buying a home there.

If you move away from New Hampshire to another state, you may owe income tax to that state on wages earned after you move. The timing of your move matters: if you move mid-year, you may owe tax to both states for the portions of the year you lived in each. Your former state (New Hampshire) will not tax your wages, but your new state will, depending on its laws.

If you are a New Hampshire resident who works in another state, you typically owe income tax to the state where you work, not to New Hampshire. You may be able to claim a credit on your federal return for taxes paid to another state, which reduces what you owe federally.

Self-employment and business income in New Hampshire

If you are self-employed or own a business, New Hampshire does not tax your personal income from that business. However, if your business is structured as a corporation or partnership, it may owe the Business Profits Tax or Business Enterprise Tax to the state. These are separate from personal income tax and apply to the business entity itself, not to you as an individual.

Self-employed people do still owe federal self-employment tax and federal income tax on their business earnings. New Hampshire's lack of state income tax does not change those federal obligations. If your business generates interest or dividend income (for example, if you have a business savings account earning interest), that interest may be subject to the 5 percent state tax on dividends and interest.

Frequently Asked Questions

Do I have to pay federal income tax if I live in New Hampshire?

Yes. New Hampshire's lack of state income tax does not affect federal income tax. You still owe federal tax on wages, and you file a federal return with the IRS. The state tax and federal tax are separate systems.

If I work in Massachusetts but live in New Hampshire, what state taxes do I owe?

You owe income tax to Massachusetts, the state where you work. Massachusetts taxes residents and non-residents on income earned within the state. You do not owe New Hampshire state income tax on wages. You may be able to claim a credit on your federal return for Massachusetts taxes paid.

Is Social Security taxed in New Hampshire?

No. New Hampshire does not tax Social Security benefits. If Social Security is your only income, you do not file a state return. If you also have interest or dividend income over $2,400, you file a return for that income, but Social Security is not included.

What if I inherited money or received a gift — do I owe New Hampshire tax on it?

No. New Hampshire does not have an inheritance tax or gift tax. Money you inherit or receive as a gift is not taxed by the state. However, if that money is invested and generates interest or dividends, those earnings are subject to the 5 percent tax if they exceed $2,400 per year.

Do I need to file a New Hampshire return if I only earned wages?

No. If your only income is wages or salary, you do not file a New Hampshire state return, regardless of how much you earned. You file a federal return with the IRS, but not a state return.