No, New Hampshire does not have a state income tax. The state has never taxed wages, salaries, or other compensation from work, and the last narrow tax on investment income was repealed effective January 1, 2025. For tax year 2025 and beyond, residents owe zero state tax on any form of personal income.
Wages and Salaries Are Not Taxed
Money you earn from a job in New Hampshire is completely exempt from state taxation. That covers wages, salaries, bonuses, and commissions. Employers withhold no state income tax from paychecks, and workers never file a state return based on W-2 earnings. This is true whether you work for a New Hampshire company or for an out-of-state employer while living in the Granite State, though the out-of-state situation has a wrinkle worth knowing about further down.
What Happened to the Interest and Dividends Tax
For decades New Hampshire did tax one slice of personal income: interest and dividends from investments. The Interest and Dividends Tax applied to things like bond interest and stock dividends, though ordinary bank and credit union interest was generally excluded.1NH Department of Revenue Administration. Interest and Dividends Tax Frequently Asked Questions
The legislature phased the tax out by cutting the rate one point per year — 5%, then 4%, then 3% for periods ending on or after December 31, 2024.2NH Department of Revenue Administration. Interest and Dividends Tax In 2023 lawmakers accelerated the schedule and repealed the tax outright. The repeal took effect for all tax periods beginning after December 31, 2024.3NH Department of Revenue Administration. Repeal of NH Interest and Dividends Tax Now in Effect
Practically speaking: if you had interest or dividend income in 2024 or earlier, you may still owe or have already paid at the 3% rate. For income earned in 2025 and later, there is no state tax on interest or dividends.4New Hampshire Department of Revenue Administration. Technical Information Release TIR 2025-001 Interest and Dividends Tax Repealed Effective January 1, 2025
Where the Money Comes From Instead
No income tax and no general sales tax still leaves schools, police, and local services to be paid for. In New Hampshire, the main source is property taxes. The state consistently ranks among the highest in the nation for effective property tax rates, and local property taxes make up the single largest source of state and local tax revenue.
How much you’ll pay depends heavily on the town. The state sets education funding formulas, but municipalities assess and collect property taxes locally. Rates vary dramatically across town lines, and a home valued at $400,000 could face a tax bill differing by thousands of dollars depending on which side of a line it sits on. Anyone moving to New Hampshire for income tax savings should budget for a higher property tax bill than they’re used to.
Some relief exists for lower-income homeowners. The Low and Moderate Income Homeowners Property Tax Relief program reimburses part of the education portion of property taxes for qualifying residents. A single filer’s total household income must be $37,000 or less; for a married couple or head of household, the ceiling is $47,000.5NH Department of Revenue Administration. Low and Moderate Property Tax Relief Towns also set elderly and blind exemptions at the local level.
Business Owners and the Self-Employed Pay Different Taxes
If you run a business in New Hampshire, “no income tax” doesn’t tell the whole story. Two state-level business taxes apply, and they reach sole proprietors, partnerships, and LLCs as well as corporations.
The Business Profits Tax (BPT) functions like a corporate income tax. It applies to net business income earned in the state at a rate of 7.5%, and every business with more than $109,000 in gross business income must file a BPT return.6NH Department of Revenue Administration. Business Taxes
The Business Enterprise Tax (BET) uses a different base: the sum of compensation, interest, and dividends paid by the business, taxed at 0.55%. Businesses with more than $298,000 in gross receipts or enterprise value tax base must file.6NH Department of Revenue Administration. Business Taxes Both thresholds are adjusted every two years. BET paid can be credited against BPT liability, so for most businesses the two taxes overlap rather than stack.
Your wages aren’t taxed. Your business profits are.
Remote Work for an Out-of-State Employer
Living in New Hampshire while working remotely for an employer based elsewhere can create a tax bill you didn’t expect. Several states enforce a “convenience of the employer” rule: if you work from home because it suits you rather than because the employer requires it for business reasons, that state treats your wages as fully taxable there, as though you still commuted to the office.
For 2026, the states applying this rule include New York, Pennsylvania, Connecticut, Delaware, Massachusetts, Nebraska, and Arkansas. Residents of most states can offset that bill with a credit from their home state’s income tax, but New Hampshire has no income tax to credit against. The out-of-state tax stands.
The defense is documentation showing the remote arrangement is required by the employer for business reasons, not chosen for personal convenience. That proof usually has to come from the employer, so getting it in writing before tax season matters.
Other Taxes You May Still Pay
Even without an income tax or a general sales tax, a few targeted state taxes apply:
- Meals and Rooms Tax. An 8.5% tax applies to restaurant meals, hotel and short-term lodging stays, and motor vehicle rentals. Everyday retail purchases are not taxed.7NH Department of Revenue Administration. Meals and Rooms (Rentals) Tax8New Hampshire General Court. New Hampshire Revised Statutes Title V Taxation Chapter 78-D Section 78-D:1
- Real Estate Transfer Tax. When real property changes hands, both buyer and seller owe $0.75 per $100 of the sale price. On a $400,000 home, that’s $3,000 from each party.9NH Department of Revenue Administration. Real Estate Transfer Tax
Federal Taxes Still Apply
The state’s status changes nothing about your federal return. New Hampshire residents still pay federal income tax, Social Security, and Medicare on their earnings on the same terms as residents of every other state.
One indirect federal effect is worth noting if you itemize. The SALT deduction lets you deduct state and local taxes paid, up to an annual cap. Because New Hampshire residents don’t pay state income tax, the only state-level taxes typically available to deduct are property taxes and, where applicable, the Meals and Rooms Tax. In a high-property-tax state, property tax alone may reach the SALT cap for many homeowners, so the practical loss of deductibility is smaller than it sounds, and for most people the income tax savings far outweigh any reduction in federal deduction.
New Hampshire also has no state estate or inheritance tax. Federal estate and gift tax rules still apply on their own schedule.10Internal Revenue Service. Whats New — Estate and Gift Tax