New Hampshire Taxes on Pensions, IRAs, and 401(k)s

New Hampshire is considered one of the more retirement-friendly states because it does not impose a traditional personal state income tax on wages, pensions, IRA withdrawals, or 401(k) distributions.

For many retirees, that means more retirement income stays available for living expenses and long-term savings needs.

The state previously taxed certain interest and dividend income, but that tax has been phased out. For retirees comparing state tax burdens, New Hampshire is often viewed as a favorable option.

Does New Hampshire Tax Retirement Income?

No, in most cases. New Hampshire does not have a broad personal state income tax on common retirement income sources.

This means pensions, IRA withdrawals, and 401(k) distributions are generally not subject to New Hampshire state income tax.

Example: A retiree receiving $35,000 from a pension and withdrawing $25,000 from a Traditional IRA would generally owe $0 in New Hampshire state income tax on that income.

Does New Hampshire Tax Pensions?

No. Pension income is generally not taxed by New Hampshire at the state level.

This can benefit retirees who depend on monthly pension payments as a primary source of income.

Common pension sources include:

• Private employer pensions
• Government pensions
• Military pensions
• Teacher pensions
• Union pensions

Does New Hampshire Tax IRA Withdrawals?

No. Traditional IRA withdrawals are generally not taxed by New Hampshire at the state level.

While federal income tax rules may still apply, the state does not add a separate tax on these withdrawals.

Example: A retiree taking $30,000 from a Traditional IRA would generally owe no New Hampshire state tax on that distribution.

Does New Hampshire Tax 401(k) Withdrawals?

No. 401(k) withdrawals are generally not taxed by New Hampshire at the state level.

Whether withdrawals are taken monthly, annually, or as required minimum distributions, the state does not impose a personal income tax on them.

What About Roth IRA and Roth 401(k) Withdrawals?

Qualified Roth withdrawals are generally tax-free federally, and New Hampshire does not impose personal income tax on these retirement distributions.

For many retirees, Roth accounts can be a highly efficient source of income.

Does New Hampshire Tax Social Security?

No. Social Security benefits are not taxed by New Hampshire at the state level.

This can be especially valuable for retirees who rely heavily on monthly Social Security income.

Is New Hampshire a Good State for Retirees?

For taxes, New Hampshire can be very attractive because most common retirement income is not taxed by the state. However, taxes are only one part of retirement planning.

Retirement decisions should also consider:

• Housing costs
• Property taxes
• Healthcare access
• Climate and weather
• Family proximity
• Overall living expenses

A complete retirement plan should weigh all factors.

Who Benefits Most From New Hampshire’s Tax Rules?

New Hampshire may be especially favorable for:

• Pension recipients
• Retirees with large IRA balances
• 401(k) savers
• Social Security recipients
• High-withdrawal retirees
• Households seeking lower income taxes

Property taxes may still be an important factor for homeowners.

New Hampshire Retirement Tax Planning Tips

If you live in or are moving to New Hampshire, consider these strategies:

• Plan withdrawals around federal tax brackets
• Review property tax costs before buying a home
• Use Roth accounts strategically
• Coordinate multiple income sources each year
• Revisit your retirement plan annually

Electronic Filing Recommendation 💻

• Most retirees do not file a New Hampshire personal income tax return for retirement income
• Keep records of pension and retirement account withdrawals for federal taxes
• Use tax software to file federal taxes
• Review your income strategy annually

Summary

New Hampshire is one of the more retirement-friendly states because pensions, IRA withdrawals, 401(k) distributions, and Social Security benefits are generally not taxed at the state level.

For retirees seeking lower taxes on retirement income, New Hampshire is a strong state to consider.