New Hampshire State Income Tax Rates and Brackets for 2025

Key Takeaways

• New Hampshire repeals 3% tax on interest and dividends starting January 1, 2025.
• No state income tax on wages, interest, or dividends; corporate tax remains 7.5%.
• Property taxes remain high; residents must plan despite no personal income tax.

New Hampshire’s tax landscape is changing in a big way for 2025, and these changes matter for residents, newcomers, and anyone considering a move to the state. The most important update is that New Hampshire will no longer tax income from interest and dividends starting January 1, 2025. This means that, for the first time, there will be no state income tax on any personal income—including wages, salaries, and investment earnings. This update explains what’s changed, who is affected, when the changes take effect, what actions are needed, and what these changes mean for people living in or moving to New Hampshire.

Summary of What Changed

As of January 1, 2025, New Hampshire has repealed its tax on interest and dividends. Before this, the state taxed income from interest and dividends at a flat rate of 3%, even though it did not tax wages or salaries. Now, both earned income (like wages) and unearned income (like interest and dividends) are free from state income tax. This change makes New Hampshire one of the few states in the United States 🇺🇸 with no personal income tax at all.

Here’s a quick summary of the key changes for 2025:

• No state income tax on wages or earned income (this has always been the case).
• No state income tax on interest and dividends (this is new for 2025).
• No state sales tax (unchanged).
• Property taxes remain significant (unchanged).
• No estate or inheritance tax (unchanged).
• Corporate income tax remains at 7.5% (unchanged).

Who Is Affected by the Change?

This tax update affects several groups:

• Current residents of New Hampshire: Anyone living in the state will benefit from not having to pay state income tax on wages, interest, or dividends.
• Retirees: People who rely on investment income, Social Security, pensions, or retirement accounts like 401(k)s and IRAs will see the most benefit, as none of these sources are taxed by the state.
• Investors: Those with significant interest and dividend income will no longer pay the 3% state tax.
• People considering moving to New Hampshire: The state’s tax-friendly environment may attract new residents, especially those looking to reduce their tax burden.
• Homeowners and property buyers: While there is no state income tax, property taxes remain high, so anyone owning or buying property should plan for this expense.
• Business owners and corporations: The corporate income tax rate remains at 7.5%, so businesses will not see a change in this area.

Effective Dates

The repeal of the interest and dividends tax takes effect on January 1, 2025. This means that for the 2025 tax year (income earned from January 1, 2025, to December 31, 2025), there will be no state income tax on any personal income. Taxpayers will file their 2025 tax returns in 2026, and for the first time, they will not need to file a state income tax return for personal income in New Hampshire.

Required Actions for Residents and Newcomers

With the new tax rules, here’s what residents and newcomers should do:

• Stop preparing for state income tax filings on personal income: Starting with the 2025 tax year, you will not need to file a state income tax return for wages, interest, or dividends.
• Review your tax planning: If you have been setting aside money to pay the 3% tax on interest and dividends, you no longer need to do so for income earned in 2025 and beyond.
• Check with your financial advisor or tax preparer: Make sure they are aware of the change and adjust your tax planning as needed.
• Plan for property taxes: Since property taxes remain high, homeowners should continue to budget for these costs.
• Monitor local tax changes: As the state loses revenue from the interest and dividends tax, local governments may adjust property tax rates or budgets. Stay informed about any changes in your town or city.
• If you are moving to New Hampshire: Consider the lack of state income tax as part of your financial planning, but also factor in property taxes and other living costs.

Implications for Pending Applications and Tax Filings

If you have already filed or are preparing to file a state tax return for the 2024 tax year (income earned in 2024), you must still pay the 3% tax on interest and dividends for that year. The repeal only applies to income earned on or after January 1, 2025.

For those with pending applications or questions about past tax years:

• 2024 and earlier: You are still responsible for paying the 3% tax on interest and dividends for these years. Make sure to file any required returns and pay any taxes owed.
• 2025 and beyond: No state income tax return is required for personal income. You do not need to file for interest and dividends earned in 2025 or later.
• If you have questions about your specific situation: Contact the New Hampshire Department of Revenue Administration for guidance. Their official website, revenue.nh.gov, provides up-to-date information and contact details.

Background and Historical Context

New Hampshire has always stood out for its unique approach to taxes. Unlike most states, it never taxed wages or salaries. Instead, it taxed only interest and dividends at a flat rate of 3%. This meant that people who earned money from investments, like bank interest or stock dividends, had to pay state tax, while those who earned only wages did not.

The decision to repeal the interest and dividends tax was made by the state legislature and took effect on January 1, 2025. This move aligns New Hampshire with a small group of states that do not tax any form of personal income. The goal is to make the state even more attractive to residents, retirees, and businesses.

Practical Implications for Different Groups

Residents and Wage Earners

For most people who earn their income from wages or salaries, nothing changes—they have never paid state income tax on their earnings. However, the repeal of the interest and dividends tax means that even those with investment income will now pay no state income tax at all.

Retirees

Retirees often rely on income from Social Security, pensions, 401(k)s, IRAs, and investments. With the repeal, none of these sources are taxed by the state. This makes New Hampshire especially attractive for retirees who want to keep more of their retirement income.

Investors

People with significant investment portfolios will benefit the most. Before 2025, if you earned $10,000 in interest and dividends, you would have paid $300 in state tax. Now, you keep the full amount.

Homeowners

While the lack of state income tax is a big plus, property taxes in New Hampshire remain high. The average effective property tax rate is about 1.61% of a home’s value. For a $300,000 home, that’s about $4,830 per year. Homeowners should continue to budget for this expense.

Business Owners

The corporate income tax rate remains at 7.5%. Businesses will not see a change in this area, but the state’s overall tax-friendly environment may help attract new companies and workers.

People Moving to New Hampshire

If you are thinking about moving to New Hampshire, the lack of state income tax is a strong incentive. Many people move from states with high income taxes to New Hampshire to save money. However, it’s important to consider property taxes and the overall cost of living.

Expert and Stakeholder Perspectives

Tax experts see the repeal of the interest and dividends tax as a major benefit for residents, especially retirees and investors. According to analysis by VisaVerge.com, this change provides real tax relief for people who rely on investment income. It also makes New Hampshire more competitive with other states that have no personal income tax.

However, some analysts point out that high property taxes may offset some of the benefits, especially for homeowners. State officials say the repeal is part of a larger plan to keep New Hampshire’s tax system simple and attractive to both people and businesses.

Future Outlook

There are no plans to bring back any form of personal income tax in New Hampshire. The state will continue to rely on property taxes and business taxes for most of its revenue. As the state adjusts to the loss of revenue from the interest and dividends tax, it will be important to watch for any changes in property tax rates or local government budgets.

Summary Table: New Hampshire State Income Tax for 2025

Here’s a quick look at how New Hampshire’s taxes compare before and after the change:

What This Means for Immigrants and New Arrivals

For immigrants and newcomers, New Hampshire’s tax system is now even simpler. There is no need to worry about state income tax on any personal income, whether it comes from work or investments. This can make settling in the state easier, as you only need to focus on federal taxes and local property taxes.

If you are moving from a state with high income taxes, you may see a big reduction in your overall tax bill. However, remember that property taxes are higher than in many other states, so it’s important to factor this into your housing decisions.

If you are a business owner or plan to start a business, the corporate income tax rate remains at 7.5%. This is something to consider when planning your finances.

Practical Steps for Taxpayers

• For 2024 and earlier: File and pay any required state taxes on interest and dividends.
• For 2025 and beyond: No state income tax return is needed for personal income.
• Homeowners: Continue to budget for property taxes.
• Newcomers: Review your tax situation and adjust your planning for the lack of state income tax.
• Consult with a tax professional: If you have questions about your specific situation, a tax advisor can help you understand how the changes affect you.

Where to Find More Information

For the most up-to-date and official information, visit the New Hampshire Department of Revenue Administration. This site provides details on all state taxes, forms, and contact information for questions.

If you need to file forms for previous years, you can find them on the same website. There are no state forms required for personal income for 2025 and beyond, but property tax forms and business tax forms are still available.

Key Takeaways

• New Hampshire has no state income tax on wages, interest, or dividends starting January 1, 2025.
• Residents do not need to file a state income tax return for personal income for 2025 and beyond.
• Property taxes remain high, so homeowners should plan for this expense.
• Retirees and investors benefit the most from the repeal of the interest and dividends tax.
• No changes to corporate income tax, sales tax (still none), or estate/inheritance tax (still none).
• No plans to reinstate a state income tax in the near future.

Final Thoughts

New Hampshire’s decision to repeal the tax on interest and dividends marks a significant shift in the state’s tax policy. For residents, retirees, investors, and newcomers, this means a simpler tax system and potentially lower overall tax bills. However, property taxes remain a key part of the state’s revenue, so it’s important to plan for these costs.

If you are considering moving to New Hampshire or are already a resident, take time to review your tax situation and adjust your planning as needed. For more details or to get help with your specific questions, visit the official New Hampshire Department of Revenue Administration website.

As reported by VisaVerge.com, New Hampshire’s move to eliminate all forms of state income tax on personal income sets it apart as one of the most tax-friendly states in the United States 🇺🇸. This change is expected to draw more people and businesses to the state, while also simplifying life for current residents. Stay informed about any future changes, especially regarding property taxes, to make the most of New Hampshire’s unique tax environment.

Learn Today

Interest and Dividends Tax → A 3% state tax on income earned from investments like bank interest and stock dividends.
State Income Tax → A tax imposed by a state on personal earnings including wages, interest, and dividends.
Corporate Income Tax → Tax levied on business profits; New Hampshire’s rate is 7.5% and remains unchanged.
Property Tax → Tax on real estate paid by homeowners, averaging 1.61% of home value in New Hampshire.
Tax Repeal → Official cancellation or removal of a previously existing tax law or requirement.

This Article in a Nutshell

Starting January 1, 2025, New Hampshire eliminates its tax on interest and dividends, creating a fully tax-free personal income system. This change benefits retirees, investors, and newcomers while property taxes remain significant. The state maintains a 7.5% corporate tax, supporting a business-friendly environment attracting residents and companies.
— By VisaVerge.com