New Hampshire does not have a personal income tax. The state collects nothing on wages, salaries, retirement distributions, capital gains, or investment income, and the last piece of personal-level taxation — the Interest and Dividends Tax — was fully repealed on January 1, 2025.1NH Department of Revenue Administration. Repeal of NH Interest and Dividends Tax Now in Effect Federal income tax still applies to every resident, and anyone running a business in the state may owe one or both of New Hampshire’s business taxes, so “no income tax” is the right headline but not the whole story.
What New Hampshire Does Not Tax
If you live or work in New Hampshire, your paycheck will show federal income tax, Social Security, and Medicare withholding. There is no state income tax line, because employers are not required to withhold one.2NH Department of Revenue Administration. Laws and Rules This holds for full-time residents and for nonresidents who work inside the state.
The state also collects nothing on investment income. Savings account interest, CD interest, stock dividends, capital gains, pensions, Social Security benefits, and IRA withdrawals are all untaxed at the state level.1NH Department of Revenue Administration. Repeal of NH Interest and Dividends Tax Now in Effect For individuals, New Hampshire now takes no direct cut of any form of personal income.
One boundary worth noting: there is also no state estate tax or inheritance tax in New Hampshire. The state’s legacy and succession taxes were repealed for deaths on or after January 1, 2003, and no state estate tax return has been required for deaths since January 1, 2005.3NH Department of Revenue Administration. Inheritance and Estate Taxes Frequently Asked Questions Federal estate tax rules are separate and unaffected.
The 2025 Repeal of the Interest and Dividends Tax
For decades, New Hampshire taxed interest and dividend income under RSA 77:4.4New Hampshire General Court. New Hampshire Code 77-4 – What Taxable The rate was 5% through 2022, dropped to 4% for 2023, and fell to 3% for 2024 as part of a legislated phase-out.5NH Department of Revenue Administration. Interest and Dividends Tax Frequently Asked Questions House Bill 2, signed by Governor Sununu during the 2023 legislative session, set the final repeal date at January 1, 2025.1NH Department of Revenue Administration. Repeal of NH Interest and Dividends Tax Now in Effect
The repeal does not wipe out prior obligations. Tax periods beginning on or before December 31, 2024, remain subject to audit and collection, so a return you still owe for 2024 or earlier is still due. The Department of Revenue Administration will not issue 2025 I&D forms, because no return is required. If you accidentally made an estimated I&D payment for 2025, request a refund from the Department in writing.1NH Department of Revenue Administration. Repeal of NH Interest and Dividends Tax Now in Effect
Business Taxes That Still Apply
The absence of a personal income tax does not shield businesses, and the thresholds catch more freelancers and small operators than people expect. New Hampshire imposes two business-level taxes, both filed through the Department of Revenue Administration’s Granite Tax Connect portal.6NH Department of Revenue Administration. Granite Tax Connect
Business Profits Tax
The Business Profits Tax applies to every business organization — corporations, LLCs, partnerships, sole proprietorships, and associations — with gross income over $109,000 from New Hampshire sources. The current rate is 7.5% of net business income.7NH Department of Revenue Administration. Business Taxes A self-employed resident whose business grosses above that threshold owes BPT even though personal wages themselves are untaxed.8NH Department of Revenue Administration. Business Profits Tax Frequently Asked Questions
Business Enterprise Tax
The Business Enterprise Tax is a separate 0.55% levy on the enterprise value tax base, which generally includes compensation paid to employees, interest paid, and dividends paid. It functions as a minimum-level business tax, owed even in years with no net profit. BET paid can be credited against BPT liability for the same period, so in most cases the two taxes overlap rather than stack.9NH Department of Revenue Administration. Business Enterprise Tax Frequently Asked Questions
Federal Income Tax Still Applies
Living in a no-income-tax state does not reduce what you owe the IRS. Every New Hampshire resident who meets the federal filing thresholds must file a federal return and pay federal income tax on earned and unearned income. For 2026, the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly, and federal marginal rates run from 10% to 37% across seven brackets.10Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill Self-employed individuals must file once net earnings reach $400.
Federal payroll taxes also apply the same way they do in every other state. Self-employed residents pay the combined 15.3% self-employment tax on net earnings (12.4% Social Security up to the wage base, plus 2.9% Medicare) on top of any Business Profits Tax owed to the state, which is a cost new business owners sometimes miss when they plan around “no state income tax.”
Because New Hampshire withholds nothing at the state level, your only lever for adjusting withholding is federal Form W-4.11Internal Revenue Service. Employees Withholding Certificate If you moved to New Hampshire from a state that taxed your income, your take-home will rise while your federal bill stays the same. Review the W-4 after a move so your withholding still matches what you’ll owe in April.
Remote Work for Out-of-State Employers
New Hampshire’s lack of an income tax creates friction for residents who work remotely for employers in states that do tax income. A handful of states apply what is sometimes called the “convenience of the employer” rule, which attempts to tax your income based on where the employer’s office sits rather than where you physically work. Massachusetts tried this with New Hampshire remote workers during the pandemic, and the dispute pushed New Hampshire to pass a protective statute.
Under that law, income earned by a New Hampshire resident for work performed entirely within the state cannot be subject to another state’s personal income tax. The practical effect is that New Hampshire has declared its intent to contest these claims on behalf of its residents, though interstate tax disputes also depend on the taxing state’s laws and enforcement posture. If you live in New Hampshire and work remotely for a company in New York, Massachusetts, or Connecticut, talk to a tax professional. You may still need to file a nonresident return in the employer’s state even if you dispute the obligation.
How the State Raises Revenue Instead
Without an income tax or a general sales tax, New Hampshire leans on a different revenue mix than most states.12NH Department of Revenue Administration. Does New Hampshire Have a Sales Tax Property taxes carry the heaviest load. The effective property tax rate on owner-occupied homes is roughly 1.4%, among the highest in the country, because local governments cover schools, roads, and public services that other states partly fund through income or sales taxes.
The state also collects an 8.5% Meals and Rooms Tax on restaurant meals, hotel stays, and short-term rentals. That is the closest thing New Hampshire has to a consumption tax, and it falls on residents and visitors alike. There is no general sales tax on goods sold in the state.12NH Department of Revenue Administration. Does New Hampshire Have a Sales Tax