New Hampshire does not tax retirement income at the state level. Social Security benefits, pension payments, and withdrawals from 401(k)s and IRAs are all exempt from state taxation, and since January 1, 2025, so are interest and dividends. That leaves federal income tax and the state’s high property taxes as the two bills that still matter for retirees living here.
What New Hampshire Does Not Tax
New Hampshire has no personal income tax on wages, and it treats retirement income the same way. Every common source is exempt at the state level:1NH Department of Revenue Administration. Interest & Dividends Tax
- Social Security benefits, regardless of your total income2Tax Foundation. States That Tax Social Security Benefits
- Pensions from private employers or government agencies
- Traditional and Roth 401(k) and IRA withdrawals
- Interest and dividends, following the 2025 repeal3NH Department of Revenue Administration. Repeal of NH Interest and Dividends Tax Now in Effect
There are no brackets, no age-based carve-outs, and no income thresholds to worry about on the state return. If your income comes from a retirement source, New Hampshire does not tax it.
The Interest and Dividends Tax Is Gone
For decades, the Interest and Dividends Tax was New Hampshire’s one exception to its no-income-tax reputation. It applied to interest from bank accounts, bonds, and CDs, along with stock dividends and certain pass-through business distributions. It never touched pensions, Social Security, or retirement account withdrawals, but it did hit retirees holding significant taxable investment accounts outside tax-sheltered vehicles.
The legislature originally scheduled repeal for after December 31, 2026, then accelerated it by two years. The tax went to zero on January 1, 2025.4New Hampshire Department of Revenue Administration. Technical Information Release TIR 2025-001 Interest and Dividends Tax Repealed Effective January 1, 2025
One caveat: the repeal is not retroactive. If you owed for the 2024 tax year or earlier and haven’t filed, that obligation stands, with any interest and penalties. No 2025 or later forms will be issued, and you should not send estimated payments for those years.3NH Department of Revenue Administration. Repeal of NH Interest and Dividends Tax Now in Effect
Federal Taxes Still Apply
No state income tax does not mean no tax. Federal income tax still reaches most retirement income, and for New Hampshire retirees it’s usually the larger annual bill.
Social Security becomes partially taxable at the federal level once your combined income (adjusted gross income, plus tax-exempt interest, plus half your benefits) crosses a threshold. Single filers see benefits start being taxed at $25,000 of combined income; married couples filing jointly, at $32,000. Above those levels, up to 85% of benefits can be subject to federal tax.5Social Security Administration. Must I Pay Taxes on Social Security Benefits?
Traditional 401(k) and IRA withdrawals, and pension payments, are taxed as ordinary income federally. Roth withdrawals are generally federal-tax-free once the account has been open five years and you’re over 59½. The upshot: New Hampshire saves you on the state side, but federal withholding and estimated payments still need attention.
The Property Tax Trade-Off
The absence of an income tax and a sales tax comes with a counterweight. New Hampshire’s average effective property tax rate is roughly 1.50%, among the highest in the country. For homeowners, this is often the single largest tax expense of the year.
The state leans on property taxes to fund local schools, roads, and emergency services. Without a broad income or sales tax to spread the load, property owners carry a bigger share. A retiree with a paid-off home may pay little else in taxes but still see a bill in the thousands or tens of thousands, depending on the town and the assessment.
Any calculation about relocating to New Hampshire for the retirement tax picture has to include this line item. Renters aren’t billed directly, but the cost typically flows through in rent.
Relief Programs for Older and Lower-Income Homeowners
Two programs can trim the property tax bill.
Elderly Exemption
Under RSA 72:39-a, municipalities may adopt an elderly exemption that reduces the assessed value of a qualifying homeowner’s property. Each town or city sets its own exemption amounts and income limits, but state law establishes floors: the income threshold cannot be lower than $13,400 for a single person or $20,400 for a married couple.6New Hampshire General Court. New Hampshire Code Title V Chapter 72 Section 72-39-a – Conditions for Elderly Exemption You must have been a New Hampshire resident for at least three consecutive years, and the property must be your principal home. Many towns set thresholds well above the statutory minimums, so check with your local assessor.
Low and Moderate Income Homeowners Property Tax Relief
This statewide program under RSA 198:57 provides relief from the State Education Property Tax. Single filers qualify with adjusted gross income of $37,000 or less; married filers or heads of household, $47,000 or less.7NH Department of Revenue Administration. Low and Moderate Income Homeowners Property Tax Relief You must own and occupy the homestead as of April 1 of the claim year. Applications are accepted only between May 1 and June 30. Miss the window and you wait a year.
If You Run a Business in Retirement
Retirement income is exempt, but active business income is not. If you consult, freelance, or run a small operation, two state-level business taxes can reach you:
- The Business Profits Tax, at 7.5% on net business income, applies to any business organization with gross business income above $109,000.8NH Department of Revenue Administration. Business Taxes
- The Business Enterprise Tax, at 0.55% on the enterprise value tax base (compensation, interest, and dividends paid by the business), applies to enterprises with gross receipts or an enterprise value tax base above $298,000.9NH Department of Revenue Administration. Business Enterprise Tax
Modest consulting or hobby income sits well below these thresholds. Sole proprietors, partnerships, and LLCs are all covered once they cross them, and BET paid can be credited against BPT so the same dollars aren’t fully taxed twice.
Estate and Inheritance
New Hampshire imposes no state estate tax and no inheritance tax. The legacy and succession tax was repealed for deaths on or after January 1, 2003, and the state estate tax return requirement ended for deaths on or after January 1, 2005.10NH Department of Revenue Administration. Inheritance & Estate Taxes
Federally, the estate tax exemption for 2026 is $15,000,000 per individual, following the increase enacted through the One, Big, Beautiful Bill signed into law in July 2025.11Internal Revenue Service. What’s New — Estate and Gift Tax Estates below that figure owe no federal estate tax either. For most New Hampshire retirees, assets can pass to heirs with no state or federal estate tax at all.