No. New Hampshire does not have a state income tax on wages or salaries, and as of January 1, 2025, the state no longer taxes interest and dividend income either. For tax year 2025 and beyond, residents owe zero state tax on any form of personal income.
Wages and Salaries Are Not Taxed
New Hampshire has never taxed money people earn from working. Wages, salaries, bonuses, and commissions are exempt from state taxation. Employers don’t withhold any state income tax from paychecks, and workers don’t file a state return based on their W-2 earnings.
That much most people already know when they look up New Hampshire’s tax status. What fewer realize is that until recently, one narrow slice of personal income was taxed.
The Interest and Dividends Tax Was Repealed in 2025
For decades, New Hampshire imposed an Interest and Dividends Tax on passive investment income. It applied to interest from bonds and dividend payments from stocks, though it generally excluded interest earned in ordinary bank and credit union accounts. Anyone whose gross interest and dividend income exceeded $2,400 per year, or $4,800 for married couples filing jointly, had to file Form DP-10 and pay the tax. Additional $1,200 exemptions were available for residents 65 or older, blind, or disabled.1NH Department of Revenue Administration. Interest and Dividends Tax Frequently Asked Questions
In 2023, the legislature voted to repeal the tax entirely, and the repeal took effect for all tax periods beginning after December 31, 2024.2NH Department of Revenue Administration. Repeal of NH Interest and Dividends Tax Now in Effect If you earned interest or dividend income in 2024 or earlier, you may still owe or have already paid the I&D Tax at the final 3% rate. For income earned in 2025 and later, there is no state tax obligation on interest or dividends.3New Hampshire Department of Revenue Administration. Technical Information Release TIR 2025-001 Interest and Dividends Tax Repealed Effective January 1, 2025
What New Hampshire Taxes Instead
No income tax and no general sales tax sounds like a bargain, but the money to fund schools, police, and local services has to come from somewhere. Understanding where matters if you’re moving to New Hampshire and comparing your total tax burden.
Property Taxes
Property taxes carry most of the load. New Hampshire consistently ranks among the highest states in the nation for effective property tax rates, and local property taxes make up the single largest source of state and local tax revenue. Rates vary dramatically from one town to the next, and even within the same county. A home valued at $400,000 could face a tax bill differing by thousands of dollars depending on which side of a town line it sits on.
Some relief exists. The Low and Moderate Income Homeowners Property Tax Relief program provides partial reimbursement of education property taxes for qualifying residents. To be eligible, a single person’s total household income must be $37,000 or less, and a married couple or head of household must earn $47,000 or less.4NH Department of Revenue Administration. Low and Moderate Property Tax Relief Elderly and blind exemptions can also reduce assessed value, with specific amounts set at the local level.
Business Taxes
If you run a business, the “no income tax” reputation only goes so far. New Hampshire imposes two separate business taxes. The Business Profits Tax (BPT) works like a corporate income tax, applying to net business income from activity in the state at a rate of 7.5%. Every business with more than $109,000 in gross business income must file, including sole proprietors, partnerships, and LLCs.5NH Department of Revenue Administration. Business Taxes
The Business Enterprise Tax (BET) taxes the sum of all compensation, interest, and dividends paid by the business at 0.55%. Businesses with more than $298,000 in gross receipts or enterprise value tax base must file. BET paid can be credited against BPT liability, so the two taxes overlap rather than stack for most businesses.5NH Department of Revenue Administration. Business Taxes Your personal wages are untaxed, but your business profits are not.
Meals and Rooms Tax
New Hampshire has no general sales tax on retail purchases, which makes it a popular shopping destination for residents of neighboring states.6New Hampshire General Court. New Hampshire Revised Statutes Title V Taxation Chapter 78-D Section 78-D:1 It does impose an 8.5% Meals and Rooms Tax on restaurant food, hotel and short-term lodging stays, and motor vehicle rentals.7NH Department of Revenue Administration. Meals and Rooms (Rentals) Tax Room rentals become exempt once a guest stays 185 consecutive days or more.8NH Department of Revenue Administration. Meals and Rooms (Rentals) Tax
Real Estate Transfer Tax
When real property changes hands, both the buyer and the seller owe a transfer tax of $0.75 per $100 of the sale price.9NH Department of Revenue Administration. Real Estate Transfer Tax That’s $7.50 per $1,000, or $3,000 on a $400,000 home. Per party. The buyer pays $3,000, and the seller pays $3,000. It’s easy to overlook during a purchase and easy to underestimate when budgeting for closing.
Working Remotely for an Out-of-State Employer
Living in New Hampshire while working remotely for an employer based in another state creates a situation that catches many people off guard. If your employer is located in a state that taxes income, that state may still claim a right to tax your wages even though you physically work from New Hampshire.
Several states enforce what’s known as a “convenience of the employer” rule. Under that approach, if you work remotely because it’s convenient for you rather than a strict business requirement, the employer’s state taxes your full income as if you commuted to their office. For 2026, the states applying this rule include New York, Pennsylvania, Connecticut, Delaware, Massachusetts, Nebraska, and Arkansas. Because New Hampshire has no income tax, you can’t offset the other state’s tax with a credit from your home state the way residents of most taxing states can.
If you live in New Hampshire and work for an employer in one of those states, your effective tax situation may not differ much from living in a state with an income tax. The main defense is demonstrating that the remote arrangement is required by the employer for business reasons rather than chosen for your personal convenience. That burden of proof falls on the employer, so getting clear documentation in writing before tax season matters.
Federal Taxes Still Apply
New Hampshire’s lack of a state income tax has no effect on your federal tax obligations. Every resident still files a federal return and pays federal income tax, Social Security tax, and Medicare tax on their earnings just like residents of every other state.
One indirect consequence shows up on your federal return if you itemize. The federal SALT deduction lets taxpayers deduct state and local taxes they’ve paid, including income taxes and property taxes, up to an annual cap. Because New Hampshire residents pay no state income tax, the only state-level taxes they can typically deduct are property taxes and, where applicable, the Meals and Rooms Tax. Property tax alone may push many New Hampshire homeowners toward the SALT cap, so the total federal deduction available is often smaller than what residents of income-tax states can claim. For most people, the state income tax savings far outweigh the smaller federal deduction.
New Hampshire also has no state estate or inheritance tax. Federal estate and gift tax rules still apply on their own thresholds.10Internal Revenue Service. Whats New — Estate and Gift Tax