New Hampshire — Personal Income Tax

New Hampshire's only personal income tax—the Interest and Dividends Tax imposed under RSA Chapter 77—was fully repealed for taxable periods beginning on or after January 1, 2025. The state now imposes no tax on individual income of any kind, including wages, salaries, self-employment income, interest, or dividends.

Prior to repeal, the tax applied only to interest and dividend income received by New Hampshire residents, not to wages or other compensation. Individuals were required to file if their gross interest and dividend income exceeded $2,400 annually ($4,800 for joint filers). The tax rate was phased down from 5% to 4% for periods ending on or after December 31, 2023, then to 3% for periods ending on or after December 31, 2024, before full repeal on January 1, 2025.

No 2025 Interest and Dividends Tax returns are required. Taxpayers who made estimated payments for 2025 in error may request a refund. Returns and payments for tax years 2024 and earlier remain due by the applicable statutory deadlines; the repeal does not provide amnesty for pre-repeal years.

Source: NH DRA – Repeal of NH Interest and Dividends Tax Now in Effect Source: RSA Chapter 77 – Taxation of Incomes (repealed)

Taxpayers required to file an Interest and Dividends Tax return for 2024 or earlier years must do so by the statutory due date. Fiscal year taxpayers file on the fifteenth day of the fourth month following the end of their fiscal year; for calendar year 2024, the due date is April 15, 2025. The Commissioner may extend the filing deadline for good cause, but taxpayers remain liable for interest and late payment charges. Taxable periods beginning on or before December 31, 2024, remain subject to audit and collection; the repeal does not provide amnesty for pre-repeal years.

Source: RSA 77:18-a – Fiscal Year Taxpayers' Returns Source: RSA 77:18-b – Extension of Time for Returns Source: NH DRA – Repeal of NH Interest and Dividends Tax Now in Effect

The Interest and Dividends Tax rate was phased down over three years before full repeal. For taxable periods ending before December 31, 2023, the rate was 5%. For taxable periods ending on or after December 31, 2023, the rate was reduced to 4%. For taxable periods ending on or after December 31, 2024, the rate was further reduced to 3%. These rates remain applicable to returns and audits for tax years 2023 and 2024, even though the tax is fully repealed for periods beginning on or after January 1, 2025.

Source: RSA 77:1 (repealed) Source: NH DRA — Interest & Dividends Tax FAQs

For taxable periods beginning on or before December 31, 2024, New Hampshire residents and fiduciaries were required to file an Interest and Dividends Tax return if their gross interest and dividend income from all sources exceeded $2,400 annually for individual filers or $4,800 for married couples filing jointly. Partnerships, limited liability companies, and associations with non-transferable shares were also required to file if gross interest and dividend income exceeded $2,400 during the taxable year. Part-year residents were entitled to the full $2,400 or $4,800 exemption and were required to file if their gross income for the entire year exceeded the applicable threshold.

Source: RSA 77:3 (repealed) Source: NH DRA — Interest & Dividends Tax FAQs

New Hampshire enacted RSA Chapter 78-F in June 2022 to declare the state's position that compensation earned by New Hampshire residents for services entirely performed within New Hampshire should not be subject to personal income taxation by any other state. The statute states it is "the sovereign interest of the state of New Hampshire" that wage, salary, or other employee compensation earned by NH residents for work physically performed in NH "shall not be subject to personal income taxation in any other state."

RSA 78-F:1 is a policy declaration, not an operative prohibition that creates a private right of action or directly limits another state's taxing authority. The statute does not empower New Hampshire residents to unilaterally refuse to file nonresident returns in other states, nor does it invalidate convenience-of-the-employer rules adopted by states such as New York, Massachusetts, Connecticut, Pennsylvania, or Delaware.

Practical effect. New Hampshire residents who work remotely for employers located in states with convenience-of-the-employer rules—or who perform any services physically in those states—remain subject to nonresident income tax filing obligations under those states' laws. Massachusetts, for example, continued to assert taxing jurisdiction over nonresident telecommuters during the COVID-19 pandemic under an emergency regulation that treated work-from-home days as Massachusetts workdays if the employer's office was in Massachusetts. New Hampshire challenged that regulation in New Hampshire v. Massachusetts, No. 22O154, but the U.S. Supreme Court denied New Hampshire's motion for leave to file a complaint in June 2021, before RSA 78-F was enacted.

The statute remains on the books as a legislative statement of New Hampshire's policy interest. It does not relieve NH residents of compliance obligations in other states, and practitioners should analyze each nonresident filing obligation under the law of the state asserting jurisdiction.

Effective date. RSA Chapter 78-F became effective June 17, 2022, the date Governor Sununu signed HB 1097 into law.

Source: HB 1097 (Final Version), 2022 Session, Chapter 185

New Hampshire imposes no personal income tax on any form of individual income, including wages, salaries, self-employment income, interest, dividends, capital gains, or retirement distributions. The state's only personal income tax—the Interest and Dividends Tax under RSA Chapter 77—was fully repealed for taxable periods beginning on or after January 1, 2025. New Hampshire has never imposed a tax on wage or salary income.

Nonresident filing obligations in other states are not affected by New Hampshire's tax structure. A New Hampshire resident who performs services in another state, or who has source income from another state (such as rental income, partnership distributions, or S corporation income from a business located in that state), remains subject to nonresident income tax filing obligations under that state's laws.

New Hampshire's lack of a personal income tax does not create an exemption from or defense to another state's assertion of taxing jurisdiction over income sourced to that state. New Hampshire residents are commonly required to file nonresident income tax returns in:

• Massachusetts — if the NH resident performs any services physically in Massachusetts, or if the NH resident works remotely for a Massachusetts employer under Massachusetts' convenience-of-the-employer rule (which treats remote work days as Massachusetts workdays if the employer's office is in Massachusetts and the remote work arrangement is for the employee's convenience rather than the employer's necessity).

• Maine — if the NH resident performs services in Maine or has Maine-source income. Maine does not impose a convenience-of-the-employer rule, so remote work performed entirely in New Hampshire for a Maine employer is generally not subject to Maine income tax.

• Vermont — if the NH resident performs services in Vermont or has Vermont-source income. Vermont does not impose a convenience-of-the-employer rule.

New Hampshire has no income tax reciprocity agreements with any state, because reciprocity agreements are mutual waivers of nonresident income tax—a tax New Hampshire does not impose. The absence of reciprocity means that a New Hampshire resident working in Massachusetts, for example, owes Massachusetts nonresident income tax on wages earned in (or attributed to) Massachusetts, and receives no offsetting credit from New Hampshire (because New Hampshire imposes no tax from which a credit could be claimed).

RSA Chapter 78-F and its limits. In June 2022, New Hampshire enacted RSA Chapter 78-F, a statutory declaration that compensation earned by NH residents for services performed entirely within New Hampshire should not be subject to income taxation by any other state. The statute is a policy statement, not an operative prohibition. It does not empower NH residents to refuse to file nonresident returns in states that assert jurisdiction under convenience-of-the-employer or other rules, nor does it invalidate those states' laws. New Hampshire challenged Massachusetts' COVID-19 emergency regulation treating remote work days as Massachusetts workdays in New Hampshire v. Massachusetts, No. 22O154, but the U.S. Supreme Court denied New Hampshire's motion for leave to file a complaint in June 2021, before RSA 78-F was enacted.

Practitioners advising New Hampshire residents with multistate income should analyze each state's sourcing rules, nexus thresholds, and convenience-of-the-employer doctrines separately. The fact that New Hampshire imposes no income tax is not a shield against another state's nonresident filing requirement.

Source: NH DRA – Repeal of NH Interest and Dividends Tax Now in Effect Source: HB 1097 (Final Version), 2022 Session, Chapter 185 – RSA 78-F