New Hampshire state income tax in 2025: A guide

New Hampshire is one of the few states that does not require residents to pay state-level income taxes on their wages. That said, you may still need to file and pay federal income tax on earned income. 

Although wage income is exempt, the state levies a 3% tax on qualifying interest and dividend (I&D) income received in 2024. This tax will be fully phased out in 2025, meaning residents will no longer pay state taxes on interest and dividends. 

Let’s explore how this unique situation can impact your tax bill and how TurboTax can simplify filing your tax return. 

*Note that even though New Hampshire has no state income tax, you are still responsible for federal taxes if you meet the IRS income filing threshold. This article addresses state-specific taxes only.   

Investment and dividend taxes in New Hampshire

While traditional wages and salaries haven’t been taxed by the Granite State in some time, New Hampshire only recently moved to eliminate taxes on investment income. For the tax year 2024, the state imposes a 3% tax on interest and dividend income over $2,400 for single filers and $4,800 for joint filers. Effective for interest and dividend income earned on or after January 1, 2025, that tax has been fully repealed. 

Other income tax considerations in New Hampshire

New Hampshire doesn’t tax retirement or pension funds, Social Security benefits, or military pay at the state level. That means retirees and military personnel can keep more money, which offers a financial advantage to those living in the state. That income may still be subject to federal taxes, depending on individual circumstances. 

You might also need to pay attention to taxation differences if you live in one state but earn money in another. For example, if you work in a state that does levy income tax—such as Massachusetts—you must file a nonresident tax return in that state and pay income taxes to that state for the income earned.

Other types of common taxes in New Hampshire

New Hampshire’s unique tax policies make it stand out among its neighbors and the rest of the United States. That’s because New Hampshire doesn’t impose a general sales tax, allowing residents and visitors to buy goods without the additional cost of sales tax. However, the state does levy specific taxes on certain goods and services, such as an 8.5% tax on meals, room rentals, and car rentals. 

No general sales tax is a great benefit for shoppers and businesses alike, but it comes at a cost: higher property taxes. New Hampshire’s property tax is among the highest in the nation, with an average effective rate of 1.61%. The rate varies based on locality because property taxes are a critical funding source for schools and local services.

How to file income tax in New Hampshire

Although New Hampshire does not have a state income tax, most residents still need to file a federal tax return. You’ll also want to consider other state-specific taxes, like property taxes, which can affect your tax burden. Staying up to date on those obligations ensures full compliance and financial preparedness. 

TurboTax makes filing your federal taxes simple, helping you navigate the Granite State’s unique tax landscape. File confidently with TurboTax or get personalized assistance from a local tax expert. We’ll help guide you each step of the way or even file your 2024 return for you!