New Hampshire does not tax wages, salaries, or other earned income. Your paystub will only show federal tax withholdings and FICA taxes, with no state income tax deduction on your wages.
No Tax on Wages
| Income Type | Tax Rate |
|---|---|
| Wages and Salary | 0% |
| Interest and Dividends | 0% (phased out) |
| Business Income | 0% |
| Retirement Income | 0% |
New Hampshire previously taxed interest and dividends at 5%, but this tax was fully phased out as of January 1, 2025. New Hampshire now has no state income tax on any type of income. Based on NH Department of Revenue Administration guidelines.
What You'll See on Your Paystub
A New Hampshire worker's paystub is simpler than most states, showing only federal income tax withholding and FICA:
| Deduction | Rate | Notes |
|---|---|---|
| Federal Income Tax | Varies | Based on W-4 and income |
| Social Security | 6.2% | Up to $181,200 wage base |
| Medicare | 1.45% | No wage limit |
| State Income Tax | None | NH has no tax on wages |
With no state income tax on wages, New Hampshire workers keep more of their paycheck. A worker earning $100,000 saves $5,000-7,000 annually compared to neighboring Massachusetts.
No Local Income Taxes
New Hampshire does not allow cities or towns to impose local income taxes. There are no income-based taxes at any level in New Hampshire.
How New Hampshire Funds Government
Without an income tax, New Hampshire relies on other revenue sources:
- Property taxes: Among the highest in the nation
- Business taxes: Business Profits Tax (7.5%) and Business Enterprise Tax (0.55%)
- Meals and rooms tax: 8.5% on restaurants and lodging
- No sales tax: New Hampshire has no general sales tax
New Hampshire's lack of income and sales taxes is offset by high property taxes. Homeowners should factor this into the overall tax picture.
Southern New Hampshire Workers
Southern New Hampshire is part of the Boston metro area:
- Many residents commute to Massachusetts for work
- Lower housing costs than Boston suburbs
- Growing tech and professional services sector
- No state income tax on wages
New Hampshire-Massachusetts Border
The NH-MA border creates important tax considerations:
- Live in NH, work in MA: You may owe Massachusetts tax on income earned there
- Live in MA, work in NH: Pay Massachusetts tax (MA taxes residents on all income)
- Live in NH, work in NH: No state income tax
Massachusetts and New Hampshire had a dispute during COVID about taxing remote workers. Generally, if you physically work in New Hampshire, that income is not taxable by Massachusetts. Establish clear records of where you work.
Manchester and Nashua
New Hampshire's largest cities are in the southern tier:
- Proximity to Boston job market
- Healthcare (Dartmouth Health, Catholic Medical Center)
- Tech companies and startups
- Financial services
- No city income taxes
Seacoast Region Workers
The Seacoast (Portsmouth area) has a diverse economy:
- Portsmouth Naval Shipyard (major employer)
- Tourism and hospitality
- Tech and biotech
- Retail (tax-free shopping draws visitors)
Upper Valley and Hanover
The Upper Valley straddles the NH-Vermont border:
- Dartmouth College and Dartmouth-Hitchcock Medical Center
- Many workers commute between NH and VT
- Vermont has income tax; New Hampshire does not
- Significant tax advantage for NH residents
Remote Workers
New Hampshire has become attractive for remote workers:
- No state income tax on remote work earnings
- Proximity to Boston without Massachusetts taxes
- Lower cost of living than Massachusetts
- Growing tech and professional workforce
If you're a remote worker:
- Your tax obligation depends on where you live, not your employer's location
- NH residents working remotely for out-of-state companies pay no state income tax
- Establish clear residency (driver's license, voter registration)
Remote workers living in New Hampshire and working for Massachusetts companies should not owe Massachusetts income tax if they work entirely from New Hampshire.
Border State Considerations
| Situation | Tax Obligation |
|---|---|
| Live in NH, work in NH | No state income tax |
| Live in NH, work in MA | MA tax on MA-source income |
| Live in NH, work in ME | ME tax on ME-source income |
| Live in NH, work in VT | VT tax on VT-source income |
| Live in MA, work in NH | MA tax (residents taxed on all income) |
Retirement in New Hampshire
New Hampshire is very tax-friendly for retirees:
- No tax on Social Security benefits
- No tax on pension income
- No tax on 401(k) or IRA distributions
- No tax on investment income (interest and dividends tax eliminated)
- No inheritance or estate tax
New Hampshire is one of the most tax-friendly states for retirees. With no income tax on any retirement income, retirees keep 100% of their pension and Social Security benefits (minus federal taxes).
New Hampshire vs. Neighboring States
| State | Tax Structure | Top Rate |
|---|---|---|
| New Hampshire | None (wages) | 0% |
| Massachusetts | Flat + Surtax | 9% |
| Maine | Progressive | 7.15% |
| Vermont | Progressive | 8.75% |
Comparing Take-Home Pay
Here's how a $100,000 annual salary compares in northern New England:
| State | State Tax | Annual Savings vs. NH |
|---|---|---|
| New Hampshire | $0 | — |
| Massachusetts | ~$5,000 | -$5,000 |
| Maine | ~$5,800 | -$5,800 |
| Vermont | ~$6,200 | -$6,200 |
New Hampshire's lack of income tax provides significant savings compared to all neighboring states. However, factor in higher property taxes when comparing total tax burden.
Key Takeaways
- New Hampshire has no tax on wages, salary, or earned income
- The Interest and Dividends Tax was fully eliminated as of 2025
- No local income taxes in any city or town
- High property taxes offset the lack of income tax
- NH residents working in other states may owe tax to those states
- Extremely tax-friendly for retirees with no tax on any retirement income