New Hampshire is one of the few states that doesn’t require residents to pay state-level earnings taxes on their wages. That stated, you should still have to file and pay federal earnings tax on earned earnings.
Though wage earnings is exempt, the state levies a 3% tax on qualifying curiosity and dividend (I&D) earnings obtained in 2024. This tax will probably be totally phased out in 2025, which means residents will not pay state taxes on curiosity and dividends.
Let’s discover how this distinctive state of affairs can affect your tax invoice and the way TurboTax can simplify submitting your tax return.
*Notice that although New Hampshire has no state earnings tax, you might be nonetheless accountable for federal taxes should you meet the IRS income filing threshold. This text addresses state-specific taxes solely.
Funding and dividend taxes in New Hampshire
Whereas conventional wages and salaries haven’t been taxed by the Granite State in a while, New Hampshire solely just lately moved to eradicate taxes on funding earnings. For the tax 12 months 2024, the state imposes a 3% tax on curiosity and dividend earnings over $2,400 for single filers and $4,800 for joint filers. Efficient for curiosity and dividend earnings earned on or after January 1, 2025, that tax has been totally repealed.
Different earnings tax concerns in New Hampshire
New Hampshire doesn’t tax retirement or pension funds, Social Safety advantages, or army pay on the state stage. Meaning retirees and army personnel can hold more cash, which provides a monetary benefit to these dwelling within the state. That earnings should still be topic to federal taxes, relying on particular person circumstances.
You may additionally want to concentrate to taxation variations should you dwell in a single state however earn cash in one other. For instance, should you work in a state that does levy earnings tax—similar to Massachusetts—it’s essential to file a nonresident tax return in that state and pay earnings taxes to that state for the earnings earned.
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Different forms of widespread taxes in New Hampshire
New Hampshire’s distinctive tax insurance policies make it stand out amongst its neighbors and the remainder of the US. That’s as a result of New Hampshire doesn’t impose a basic gross sales tax, permitting residents and guests to purchase items with out the extra value of gross sales tax. Nevertheless, the state does levy particular taxes on sure items and providers, similar to an 8.5% tax on meals, room leases, and automobile leases.
No basic gross sales tax is a superb profit for buyers and companies alike, but it surely comes at a value: increased property taxes. New Hampshire’s property tax is among the many highest within the nation, with a median efficient price of 1.61%. The speed varies based mostly on locality as a result of property taxes are a important funding supply for faculties and native providers.
The right way to file earnings tax in New Hampshire
Though New Hampshire doesn’t have a state earnings tax, most residents nonetheless have to file a federal tax return. You’ll additionally need to contemplate different state-specific taxes, like property taxes, which may have an effect on your tax burden. Staying updated on these obligations ensures full compliance and monetary preparedness.
TurboTax makes submitting your federal taxes easy, serving to you navigate the Granite State’s distinctive tax panorama. File confidently with TurboTax or get personalised help from a local tax expert. We’ll assist information you every step of the way in which and even file your 2024 return for you!