New Hampshire is unique when it comes to state taxes.
Unlike most states, New Hampshire does not tax wages, salaries, pensions, IRA withdrawals, or 401(k) distributions.
However, it has historically taxed interest and dividend income.
This guide explains how New Hampshire’s state tax system works, what income is taxed, what is not taxed, and what residents should know when planning.
Does New Hampshire Have a State Income Tax?
New Hampshire does not have a traditional personal income tax on earned income.
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This means:
• No tax on wages and salaries
• No tax on business income reported as personal income
• No tax on pension income
• No tax on IRA or 401(k) withdrawals
• No tax on Social Security benefits
There are no income tax brackets for ordinary earned income.
Interest and Dividends Tax (Historical Context)
New Hampshire previously imposed a tax on interest and dividend income.
The interest and dividends tax has been fully repealed.
That means:
• Interest income is no longer taxed
• Dividend income is no longer taxed
• Capital gains are not taxed
New Hampshire does not tax personal income in any broad category.
New Hampshire Income Tax Table
| Tax Rate | Taxable Income |
|---|---|
| 0% | All personal income |
There are no progressive brackets and no flat rate applied to wages or retirement income.
How This Impacts Retirees
New Hampshire is one of the most tax-friendly states for retirees in terms of income tax.
The state does not tax:
• Social Security benefits
• Pension income
• 401(k) distributions
• Roth IRA qualified distributions
• Investment income
Example:
If you receive $40,000 from a pension, $25,000 from Social Security, and $10,000 in dividends, your New Hampshire state income tax is $0.
Federal income tax may still apply, but the state does not tax that income.
What Taxes Does New Hampshire Have?
Although there is no personal income tax, New Hampshire raises revenue in other ways:
• Property taxes
• Business taxes
• Meals and rooms tax
• Select excise taxes
Property taxes in particular can be higher than the national average.
Marginal vs Effective Tax Rate
Because New Hampshire does not tax personal income:
• There is no marginal income tax rate
• There is no effective state income tax rate on personal income
Your overall tax burden depends more on property and consumption taxes rather than income.
Planning Considerations
• Retirement withdrawals are state tax-free
• Investment income is state tax-free
• Large one-time withdrawals do not increase state tax
• Property tax planning becomes more important
New Hampshire can be attractive for high-income earners and retirees who want to minimize state income tax exposure.
💻 Electronic Filing Recommendation
Since New Hampshire does not impose a personal income tax, most residents only need to file a federal return.
E-filing is recommended because it:
• Automatically applies federal tax brackets
• Accurately calculates retirement income
• Reduces math errors
• Speeds up refunds
Tax software ensures federal tax is handled correctly, even though no state income return is required.
Final Thoughts
New Hampshire has no personal income tax. Wages, pensions, IRA withdrawals, 401(k) distributions, Social Security benefits, and investment income are not taxed at the state level.
While property and other taxes still apply, New Hampshire remains one of the most income-tax-friendly states in the country.
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