New Hampshire does not tax wages or salaries
New Hampshire has no state income tax on wages, salaries, or most other forms of personal income. This means your paycheck is not subject to state income tax withholding, and you do not file a state income tax return for wages earned in New Hampshire.
However, New Hampshire does tax two specific types of income: interest and dividends. If you earn money from savings accounts, bonds, stocks, or investment accounts, you may owe New Hampshire state tax on that income. The tax applies only to residents — people who live in New Hampshire — not to people who work there but live elsewhere.
This makes New Hampshire one of nine states with no broad income tax. The other eight are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.
Key Takeaways
- New Hampshire does not tax wages or salaries, so you will not see state income tax taken from your paycheck.
- Interest income and dividend income are taxed by New Hampshire at a flat rate, though certain types of retirement income are exempt.
- Only New Hampshire residents pay state tax on interest and dividends; people who work in New Hampshire but live elsewhere do not.
- If you move to New Hampshire from another state, you do not owe back taxes on wages you earned before moving.
What income New Hampshire actually taxes
New Hampshire's tax applies to interest income and dividend income. Interest includes money earned from savings accounts, money market accounts, CDs, bonds, and any other investment that pays you interest. Dividends are payments made to you by companies or funds when you own shares of stock.
The tax rate on interest and dividends is 5 percent. This applies to all residents, regardless of age or income level. You report this income on the New Hampshire Form DP-10, which is filed with the state Department of Revenue Administration.
Several types of income are exempt from this tax. Retirement income — including Social Security, pensions, and distributions from IRAs and 401(k) accounts — is not taxed. Income from municipal bonds issued by New Hampshire municipalities is also exempt. Certain types of investment income, such as capital gains from selling stocks or real estate, are not subject to the interest and dividend tax either.
Who has to file and when
You must file a New Hampshire interest and dividend return if you are a resident and your interest and dividend income exceeds a certain threshold. The threshold changes yearly and is set by the state Department of Revenue Administration. In recent years, the threshold has been around $2,400 for single filers, though you should check the current year's threshold on the department's website before filing.
The filing important date is the same as the federal income tax important date: April 15 of the following year, or the next business day if April 15 falls on a weekend or holiday. If you file your federal return late, your New Hampshire return is also due on the same extended date.
You file using Form DP-10 and can submit it by mail or electronically through the state's online filing system. The Department of Revenue Administration website provides instructions and the current year's form.
How this affects people who work in New Hampshire but live elsewhere
If you live in a neighboring state — Massachusetts, Vermont, Maine, or any other state — and work in New Hampshire, you do not owe New Hampshire state income tax on your wages. Your employer will not withhold New Hampshire tax from your paycheck, and you do not file a New Hampshire return.
You will owe income tax to the state where you live. Most states that border New Hampshire have reciprocal agreements that prevent double taxation, meaning you pay tax only to your home state. Check your home state's tax rules or contact your state's revenue department if you are unsure.
If you earn interest or dividend income and live in another state, you also do not owe New Hampshire tax on that income, even if you work in New Hampshire. Tax on interest and dividends applies only to residents.
Moving to New Hampshire from another state
When you move to New Hampshire, you become a resident for tax purposes. However, you do not owe New Hampshire tax on wages you earned before you moved, even if those wages were earned in New Hampshire. Your tax obligation to your previous state ends on the date you move.
Starting the year you move, you may owe New Hampshire tax on interest and dividend income if your income exceeds the filing threshold. Some states require you to file a part-year resident return in both your old state and New Hampshire for the year you move. Contact both your old state's revenue department and New Hampshire's Department of Revenue Administration to understand your obligations for that transition year.
How to find your filing threshold and file your return
The New Hampshire Department of Revenue Administration publishes the current year's filing threshold on its website each year. You can find this information by visiting the department's website and looking for the interest and dividend tax section, or by calling their taxpayer information line.
To file, you will need records of all interest and dividend income you received during the year. Banks and investment companies send 1099 forms (1099-INT for interest, 1099-DIV for dividends) by January 31 of the following year. Gather these forms and use them to complete Form DP-10.
You can file by mail by sending the completed form and any required documentation to the address listed on the form. Electronic filing is also available through the state's online system. Keep a copy of your filed return and any supporting documents for your records.
Frequently Asked Questions
Do I owe New Hampshire tax if I work there but live in Massachusetts?
No. New Hampshire taxes only residents on interest and dividend income, and does not tax wages at all. You owe income tax only to Massachusetts, your home state. Your New Hampshire employer will not withhold state tax from your paycheck.
What counts as dividend income for New Hampshire tax purposes?
Dividends are payments made to you by companies or mutual funds when you own shares of stock. This includes regular cash dividends, reinvested dividends, and distributions from dividend-paying mutual funds. Capital gains — money you make when you sell a stock for more than you paid — are not taxed by New Hampshire.
Is Social Security taxed in New Hampshire?
No. Social Security benefits are exempt from New Hampshire's interest and dividend tax. Pensions, IRA distributions, and 401(k) withdrawals are also exempt. Only interest and dividend income is subject to the tax.
What if I forget to file my interest and dividend return?
If you owe tax and miss the important date, the state may assess penalties and interest on the unpaid amount. If you realize you missed a filing important date, contact the Department of Revenue Administration to discuss your options. Filing late is better than not filing at all.
Do I need to file a federal return if I only have interest and dividend income below New Hampshire's threshold?
You do not need to file a New Hampshire return if your interest and dividend income is below the state's threshold. However, you may still need to file a federal return depending on your total income and filing status. Check the IRS website or consult a tax resource for federal filing requirements.