New Hampshire does not tax pensions or Social Security. The state has no personal income tax on wages, retirement distributions, or benefit checks, and the last tax that touched any form of personal investment income — the Interest and Dividends Tax — was fully repealed effective January 1, 2025. Every dollar you draw from a pension, 401(k), 403(b), or IRA arrives in your bank account without any state withholding or state return to file. Federal tax rules still apply, but at the state level, retirement income in New Hampshire is left alone.
What “No State Tax” Actually Covers
New Hampshire is one of eight states with no individual income tax, alongside Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming. Because the state never enacted a tax on wages or salary, distributions from qualified retirement plans have always been outside its reach. That includes:
- Private and public pension checks
- Traditional 401(k), 403(b), and 457 withdrawals
- Traditional and Roth IRA distributions
- Military retired pay
- Social Security retirement benefits, Social Security disability, and Supplemental Security Income
There is no state retirement-income form, no state withholding election to make, and no state exemption to claim, because there is no state tax to exempt anything from.
The Interest and Dividends Tax Is Gone
For decades, New Hampshire taxed interest earned in bank accounts and dividends from investments held outside retirement accounts. This was the state’s only direct tax on personal income, and it caught retirees who held taxable brokerage accounts or earned meaningful bank interest. Under RSA 77:4, the tax applied to interest from bonds, notes, and money at interest, as well as dividends on corporate shares.1New Hampshire General Court. New Hampshire Revised Statutes Section 77:4 – What Taxable
House Bill 2, signed by Governor Chris Sununu during the 2023 legislative session, established a phased repeal. The rate dropped from 5 percent to 4 percent for tax periods ending on or after December 31, 2023, then to 3 percent for periods ending on or after December 31, 2024, before the full repeal took effect on January 1, 2025.2New Hampshire Department of Revenue Administration. Repeal of NH Interest and Dividends Tax Now in Effect New Hampshire taxpayers are no longer required to file or pay the Interest and Dividends Tax for any tax period beginning on or after that date.
Even while the tax existed, interest and dividends earned inside employee benefit plans and tax-deferred accounts were carved out under RSA 77:4-b.3New Hampshire General Court. New Hampshire Revised Statutes Section 77:4-b – Interest and Dividend Income of Employee Benefit Plans and Tax Deferred Investments Not Taxable So a retiree with $200,000 in a dividend-paying stock portfolio generating $8,000 a year used to owe state tax on that income; today they owe nothing.
Federal Tax Still Applies
The absence of state tax doesn’t eliminate the IRS. Money withdrawn from traditional IRAs, 401(k) plans, 403(b) accounts, and most pensions is taxed as ordinary income at the federal level. Qualified Roth withdrawals are federally tax-free when the account has been open at least five years and the owner is 59½ or older.
Social Security itself is partly federally taxable for higher earners. The IRS uses a “combined income” formula — half your Social Security benefit plus all other taxable income and tax-exempt interest. Single filers with combined income above $25,000 may owe federal tax on up to 50 percent of their benefits, and that share rises to 85 percent above $34,000. For married couples filing jointly, the thresholds are $32,000 and $44,000. These thresholds have not been adjusted for inflation since 1993, which pulls more retirees into taxation each year.
One recent federal change cuts the other way. Under provisions of the One, Big, Beautiful Bill signed in 2025, taxpayers age 65 and older can claim an additional $6,000 deduction on their federal return, or $12,000 if both spouses qualify, on top of the existing standard deduction for seniors. It’s available for tax years 2025 through 2028 and phases out for single filers with modified adjusted gross income above $75,000 or joint filers above $150,000.4Internal Revenue Service. Check Your Eligibility for the New Enhanced Deduction for Seniors For retirees near those income levels, it can meaningfully reduce or eliminate federal tax on Social Security.
One more federal wrinkle worth flagging: withdrawals taken before age 59½ typically trigger an additional 10 percent early distribution tax, and 25 percent for SIMPLE IRAs in the first two years. Several exceptions apply, including separation from service at 55 or older from an employer plan, disability, substantially equal periodic payments, and unreimbursed medical expenses exceeding 7.5 percent of AGI.5Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions All of this gets handled on your federal return; New Hampshire plays no part.
No State Estate or Inheritance Tax
New Hampshire imposes no estate tax and no inheritance tax. The Legacy and Succession Tax and the Transfer Tax on nonresident personal property were both repealed effective January 1, 2003, and no New Hampshire estate tax return has been required for deaths on or after January 1, 2005.6New Hampshire Department of Revenue Administration. Inheritance and Estate Taxes Pension balances, retirement accounts, and other assets pass to heirs without any state-level death tax. Federal estate tax still applies, but only to estates above the federal exemption, which for 2025 sits at approximately $13.99 million per individual.
The Property Tax Trade-Off
The lack of an income tax comes with a catch that surprises retirees moving to New Hampshire for tax reasons. The state funds schools, roads, and municipal services largely through local property taxes, and the resulting rates are among the highest in the country. On a fixed retirement income, property tax bills can easily exceed what a moderate income tax would have cost in a state with cheaper real estate.
Two forms of relief exist. The Low and Moderate Income Homeowners Property Tax Relief program provides partial reimbursement of the state education property tax. To qualify, a single person must have total household income of $37,000 or less, or $47,000 or less for married filers or heads of household. Claims are filed with the Department of Revenue Administration between May 1 and June 30 following the final property tax bill.7New Hampshire Department of Revenue Administration. Low and Moderate Property Tax Relief
Separately, municipalities can adopt an elderly exemption under RSA 72:39-a. A resident must be at least 65, have lived in New Hampshire for at least three consecutive years, and meet locally set income limits. State law sets a floor: net income no less than $13,400 for a single person or $20,400 for a married couple. Individual towns often set higher thresholds and determine their own exemption amounts, so the benefit varies by where you live.8New Hampshire General Court. New Hampshire Revised Statutes Section 72:39-a – Conditions for Elderly Exemption
Moving To or From New Hampshire
Federal law protects retirees who relocate. Under 4 U.S.C. § 114, no state may impose an income tax on the retirement income of someone who is not a resident or domiciliary of that state.9Office of the Law Revision Counsel. 4 USC 114 – Limitation on State Income Taxation of Certain Pension Income The protection covers 401(k) and 403(b) distributions, traditional and Roth IRAs, 457 deferred compensation plans, government pensions, and military retired pay, among other sources.
If you earned a pension working in a state with an income tax and then retired to New Hampshire, your former state cannot chase you for tax on those payments. If you leave New Hampshire for a state that does tax retirement income, New Hampshire won’t follow you with a bill either, because it never had one to send. The protection applies as long as the income comes from a qualifying plan and is paid as a series of substantially equal periodic payments over your life expectancy or for at least 10 years.