New Hampshire does not tax pensions or Social Security. The state has no broad personal income tax, so pension checks, 401(k) and 403(b) withdrawals, traditional and Roth IRA distributions, and Social Security retirement, disability, and SSI payments all arrive free of state tax. Federal income tax can still apply to most of these, but nothing is owed to Concord.
What New Hampshire Leaves Alone
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. There is no state return to file for pension income, and no state withholding to arrange on an IRA or 401(k) distribution.
Social Security benefits sit in the same place. Retirement, disability, and Supplemental Security Income payments are not reported on any New Hampshire form and are not subject to any state calculation. A resident drawing the maximum federal benefit owes the state nothing on it.
The one tax that historically touched any personal investment income — the Interest and Dividends Tax — was fully repealed effective January 1, 2025, and retirement accounts had always been carved out of it anyway. No New Hampshire taxpayer is required to file or pay that tax for any period beginning on or after that date.1New Hampshire Department of Revenue Administration. Repeal of NH Interest and Dividends Tax Now in Effect
Federal Tax Still Applies
The absence of state tax does not change what the IRS collects. Money withdrawn from a traditional IRA, 401(k), 403(b), or most pensions is taxed as ordinary income on your federal return. Qualified Roth withdrawals are generally federal-tax-free if the account has been open at least five years and you are 59½ or older.
Social Security is partly taxed at the federal level for higher earners. The IRS uses a “combined income” formula: half of 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, rising to 85 percent above $34,000. For married couples filing jointly, the thresholds are $32,000 and $44,000. Those thresholds have not been adjusted for inflation since 1993, which pulls more retirees into taxation each year.
One recent federal change pushes 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. The extra deduction is 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 $150,000.2Internal Revenue Service. Check Your Eligibility for the New Enhanced Deduction for Seniors For New Hampshire retirees near those income lines, it can meaningfully reduce or eliminate the federal tax on Social Security.
Withdrawals before age 59½ typically trigger an added 10 percent early distribution tax on top of regular federal income tax, with several exceptions available for separation from service at 55 or older, substantially equal periodic payments, large medical expenses, disability, and other situations.3Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions None of this flows to a New Hampshire form.
Interest, Dividends, and Taxable Brokerage Accounts
Retirees who hold money outside of retirement accounts often ask whether bank interest or stock dividends are taxed. Until recently they were. The Interest and Dividends Tax applied under RSA 77:4 to interest from bonds and notes and to dividends on corporate shares.4New Hampshire General Court. New Hampshire Revised Statutes Section 77:4 – What Taxable House Bill 2, signed by Governor Chris Sununu in 2023, phased the rate down from 5 percent to 4 percent, then to 3 percent, and then to zero as of January 1, 2025.
For a retiree with a sizable taxable brokerage account, the practical effect is simple. A portfolio throwing off $8,000 a year in dividends would once have produced a state tax bill above the exemption amount. Now it produces none. All interest and dividend income, in any amount, is state-tax-free.
The Property Tax Trade-Off
No income tax and no sales tax come with a cost that catches people moving to New Hampshire for retirement. The state relies heavily on local property taxes to fund schools, roads, and municipal services, and the resulting rates are among the highest in the country. On a fixed income, the property bill can easily outweigh the income tax savings compared with a state that taxes pensions modestly but has cheaper real estate.
Two forms of relief exist. The Low and Moderate Income Homeowners Property Tax Relief program partially reimburses the state education portion of the property tax. A single filer must have household income of $37,000 or less, or $47,000 or less for married filers and heads of household. Claims go to the Department of Revenue Administration between May 1 and June 30 following the final property tax bill.5New Hampshire Department of Revenue Administration. Low and Moderate Property Tax Relief
Municipalities can also adopt an elderly exemption under RSA 72:39-a. The resident must be at least 65, have lived in New Hampshire for at least three consecutive years, and meet income limits set locally. State law sets a floor of $13,400 in net income for a single person and $20,400 for a married couple, but towns and cities frequently set higher thresholds and their own exemption amounts, so the benefit varies by location.6New Hampshire General Court. New Hampshire Revised Statutes Section 72:39-a – Conditions for Elderly Exemption Check with the town or city assessor before assuming a figure.
Estates and Inheritance
New Hampshire imposes no estate tax and no inheritance tax. The state’s Legacy and Succession Tax and its Transfer Tax on nonresident personal property were repealed effective January 1, 2003, and no state estate tax return has been required for deaths on or after January 1, 2005.7New Hampshire Department of Revenue Administration. Inheritance and Estate Taxes Pensions, retirement accounts, and other assets pass to heirs with no state death tax attached. Federal estate tax still applies, but only to estates above the federal exemption, which for 2025 is approximately $13.99 million per individual.
Moving To or From the State
Federal law protects people who earn a pension in one state and retire to another. Under 4 U.S.C. § 114, no state may tax the retirement income of someone who is not a resident or domiciliary of that state.8Office 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) plans, 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 moved to New Hampshire, that former state cannot reach back for tax on the pension payments. And if you leave New Hampshire for a state that does tax retirement income, New Hampshire will not send a bill, because it never had one to begin with. The federal protection applies as long as the income comes from a qualifying plan and is paid as substantially equal periodic payments over your life expectancy or for at least 10 years.