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New Hampshire State Income Tax: Rates and Who Pays in 2023-2024

While there isn’t a fixed New Hampshire State Income Tax, the state does uphold a 5% tax on interest and dividend earnings. Read on to know more.
New Hampshire State Income Tax
New Hampshire State Income Tax: Rates and Who Pays in 2023-2024
Let’s try and break down what goes into the concept of New Hampshire State Income Tax.
In this article

Navigating the intricacies of state income tax can often be a complex endeavor, especially when it pertains to a state with a unique tax landscape like New Hampshire. Renowned for its absence of general sales tax and state income tax on earned wages, New Hampshire has garnered significant attention as a tax-friendly destination. However, gaining a deeper understanding of New Hampshire State Income Tax regulations and intricacies is crucial for individuals and businesses. 

This detailed guide on New Hampshire State Income Tax endeavors to illuminate the various aspects of its tax structure, encompassing rates, deductions, and residency regulations, thereby ensuring readers gain comprehensive insights into the complexities of New Hampshire’s tax landscape.

New Hampshire stands as one of the most tax-advantaged states nationwide, boasting no personal income tax or sales tax. Nevertheless, it upholds a 5% tax on interest and dividend earnings, specifically for residents with a combined income surpassing $2,400 ($4,800 for married individuals). This tax obligation pertains to residents, partnerships, limited liability companies, and fiduciaries possessing non-transferable shares, generating more than $2,400 annually ($4,800 for joint filers) from their investments. Also, check out Beem to get a quick and accurate estimate of your federal and state taxes and get the maximum refund.

Does New Hampshire have state income tax

New Hampshire distinguishes itself by not imposing a state sales tax and refraining from levying income tax on earned wages. However, it does implement a 5% tax rate on income from dividends and interest.

This taxation impacts different entities, such as individuals residing in the state, partnerships, limited liability companies, and trustees with non-transferable shares, making more than $2,400 annually ($4,800 for joint filers) from their investments. Moreover, companies conducting operations in the state and earning above $92,000 of gross income are liable to the “Business Profits Tax,” known as BPT.

New Hampshire State Income Tax – How much will the income after tax in New Hampshire with Filing Status

Annual IncomeFiling Status –
Single
Filing Status –
Married Filing Jointly
Filing Status –
Head of Household
$12000$12,000$12,000$12,000
$15000$14,795$15,000$15,000
$20000$19,295$20,000$19,940
$22000$21,095$22,000$21,740
$30000$28,160$29,590$28,940
$35000$32,560$34,090$33,421
$36000$33,440$34,990$34,301
$42000$38,720$40,390$39,581
$45000$41,360$43,090$42,221
$48000$44,000$45,759$44,861
$52000$47,520$49,279$48,381
$54000$50,912$52,799$51,901
$60000$54,032$56,319$55,421
$62000$55,592$58,079$57,181
$65000$57,932$60,719$59,821
$70000$61,832$65,119$64,221
$75000$62,222$69,519$68,621
$80000$73,919$73,919$72,551
$85000$73,532$78,319$76,451
$90000$77,432$82,719$80,351
$92000$78,992$84,479$81,911
$95000$81,332$87,119$84,251
$114000$95,913$103,384$98,960
$115000$96,673$104,164$99,720
$140000$115,673$123,664$118,720
$150000$123,273$131,464$126,320
$160000$130,873$139,264$133,920
$165000$134,673$143,164$137,720
$190000$153,113$162,664$156,676
$185000$149,713$158,764$152,920
$260000$199,780$216,145$203,536
$300000$225,780$246,545$225,780
$350000$258,280$284,545$262,036
$120000$100,473$108,064$103,520
$135000$111,873$119,764$114,920
$170000$138,473$147,064$141,520
$180000$146,073$154,864$149,120
$250000$193,280$208,545$197,036
$28000$26,400$27,790$27,140
$32000$29,920$31,390$30,740
$40000$36,960$38,590$37,821
$44000$40,480$42,190$41,341
$53000$48,400$50,159$49,261
$56000$50,912$52,799$51,901
$58000$52,472$54,559$53,661

New Hampshire state income tax rates and tax brackets

While New Hampshire does not impose a conventional income tax, it does tax interest and dividends at a 5% flat rate. This taxation mechanism holds significance for individuals generating income from these specific sources, necessitating an understanding of the applicable rates and corresponding tax brackets. New Hampshire charges a tax on all businesses that generate more than $92,000 of gross income while operating within the state. The rates for businesses are as follows.

BPT rateOn an income of at leastFor tax years ending on or after
7.6%$92,000Dec. 31, 2022
7.5%$103,000Dec. 31, 2023

What is New Hampshire’s standard deduction?

New Hampshire does not allow deductions from gross income for individuals and partnerships. However, specific exemptions are available for the tax on dividends and interest, including a $1,200 exemption for residents aged 65 or older, another $1,200 exemption for blind residents regardless of age, and a $1,200 exemption for disabled individuals unable to work, provided they have not yet reached the age of 65.

How to calculate New Hampshire state income tax

New Hampshire employs a straightforward flat tax system, with a fixed rate of 5% applied to interest and dividends income. Taxpayers can easily calculate their New Hampshire state income tax by multiplying their interest and dividends income by 0.05, resulting in the total tax amount owed to the state.

Also Read: Maine State Income Tax Rates

Do I have to pay New Hampshire state income tax?

Residents of New Hampshire are required to pay a 5% tax on interest and dividends. At the same time, they are not subject to an income tax on wages and salaries. Part-year residents may have tax obligations based on residency status changes during the year. In contrast, nonresidents are generally exempt from New Hampshire’s interest and dividends tax.

Always consult a tax professional or look for online assistance provides clear any doubts.

How to pay New Hampshire state income tax

New Hampshire state taxes are typically payable via check, money order, or cashier’s check. Additionally, the Department of Revenue Administration allows the use of credit or debit cards for online payment of taxes, penalties, interest, or fees administered or collected by the department. Taxpayers can choose from various convenient payment options to fulfill their tax obligations in New Hampshire.

Am I a resident for New Hampshire income tax purposes?

Determining one’s residency status in the context of New Hampshire’s income tax requirements lays the groundwork for ascertaining the extent of one’s tax liabilities. Understanding the criteria for residency aids in comprehending the corresponding tax obligations and benefits.

Resident status rules

New Hampshire’s definition of a resident encompasses an individual who has inhabited or resided within the state for the entire taxable year, with temporary absences not affecting residency status. Understanding these specific criteria is crucial for determining an individual’s classification as a resident for tax purposes. Familiarity with these rules enables individuals to assess their obligations under the state’s tax laws, ensuring compliance with the relevant regulations.

Part-year resident status rules

A part-year resident in New Hampshire refers to an individual whose residency was established in another state for a part of the year, either by permanently establishing or abandoning New Hampshire residency during the same period.

Concerning New Hampshire’s Interest and Dividends Tax, only the interest and dividend income earned during the period of New Hampshire residency is taxable. Part-year residents are eligible for a $2,400 exemption (or $4,800 for joint filers). They must file a return if their adjusted taxable income exceeds $2,400 (or $4,800 for joint filers) for the entire year.

Nonresident status rules

Nonresidents in New Hampshire are not obligated to file a New Hampshire interest and dividends tax return. These individuals did not reside within the state during the tax year and, therefore, are not subject to the requirements for filing a New Hampshire interest and dividends tax return. 

Where is my New Hampshire state income tax refund

To ascertain the status of your New Hampshire interest and dividends refund, it is advised to contact the Department of Revenue Administration. For taxpayers, gaining insights into the process of receiving tax refunds from the state is imperative. Familiarizing oneself with the available channels and the expected timelines for receiving tax refunds fosters a comprehensive understanding of the post-tax payment procedures in New Hampshire.

New Hampshire State Income Tax
New Hampshire State Income Tax: Rates and Who Pays in 2023-2024 2

Why did my New Hampshire state income tax increase

Comprehending the contributing factors to an upsurge in New Hampshire’s state income tax is pivotal for assessing fluctuations in tax liabilities. Understanding the rationale behind the tax increase empowers individuals to make informed adjustments to their financial planning and adeptly manage their tax obligations.

Notably, while New Hampshire currently imposes a 5% tax on dividends and interest, legislative measures are underway to phase out this tax. The rate is scheduled to decrease gradually, reaching 1% in 2026 before the tax’s complete repeal in 2027, as outlined by the New Hampshire Department of Revenue Administration.

New Hampshire sales tax

While New Hampshire does not impose a general sales tax, understanding the nuances of the state’s sales tax policies is essential for individuals engaged in commercial activities. Knowledge of the specific types of transactions subject to sales tax ensures compliance with New Hampshire’s tax laws.

Five things to know about New Hampshire income tax

  1. New Hampshire has no general income tax on earned wages, providing residents a significant advantage over many other states.
  2. New Hampshire implements a flat 5.00% individual income tax rate exclusively on interest and dividends income.
  3. The state maintains a 7.50% corporate income tax rate, affecting businesses within its jurisdiction.
  4. New Hampshire distinguishes itself by not having a state sales tax and refraining from imposing local sales taxes, providing a unique tax environment for residents and businesses.
  5. The median property tax rate in New Hampshire is 1.93% of the assessed home value, as reported by the Tax Foundation, underscoring the state’s property tax landscape.

Use Beem to get a quick and accurate estimate of your federal and state taxes and get the maximum refund.

FAQs

Is New Hampshire a high-tax state?

New Hampshire is often perceived as a low-tax state due to the absence of general state income and sales taxes. However, certain specific taxes, such as those on interest and dividends, do exist. Compared to some other states, New Hampshire is generally considered to have a relatively moderate tax burden.

Is New Hampshire a tax-friendly state?

New Hampshire is widely regarded as a tax-friendly state, primarily due to the absence of a general state income tax and sales tax. This feature has made it an attractive location for businesses and individuals seeking a more favorable tax environment.

Is New Hampshire a good place to live for taxes?

New Hampshire is a favorable place to live for taxes, especially for those who aim to minimize their tax burden. The absence of general sales tax and state income tax on earned wages contributes significantly to the state’s appeal regarding tax-friendliness.

How much of my paycheck goes to taxes in New Hampshire?

In New Hampshire, the absence of a state income tax on earned wages implies that a significant portion of an individual’s paycheck remains untaxed. However, it is essential to consider other taxes that may apply, such as those on interest and dividends, which can impact the overall tax burden.

Does New Hampshire tax income earned in another state?

New Hampshire does not tax income earned in another state. Individuals who are New Hampshire residents but earn income outside the state are generally not subject to New Hampshire’s income tax for that out-of-state income.

Does the state of New Hampshire tax social security income?

New Hampshire does not tax social security income, making it a favorable state for retirees. Social security benefits are not subject to state income tax, contributing to the overall tax-friendly environment for retirees.

Can New Hampshire state income tax go up?

While the absence of a general state income tax on earned wages remains a consistent feature of New Hampshire’s tax system, changes in specific tax laws or policies can potentially impact other forms of taxable income, such as those from interest and dividends.

Do seniors have to pay state income tax in New Hampshire?

New Hampshire does not tax social security income, and it also does not levy a general state income tax. Therefore, seniors, like other residents, are not typically subject to state income tax on their earnings.

Does New Hampshire have a state income tax for the military?

New Hampshire does not have specific state income taxes for military personnel. Service members stationed in New Hampshire are generally not required to pay state income tax on their military pay, as the state does not impose a tax on earned wages.

What are New Hampshire’s state income taxes for LLCs?

New Hampshire does not impose a direct state income tax on LLCs. However, LLC members may face taxes on interest and dividends until the phase-out in 2027. The state does not have a general sales tax, but certain industry-specific and employer taxes may apply.

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This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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