New Hampshire State Income Tax Withholding
Last Updated: January 2026
Overview
New Hampshire does not impose a state income tax on wages or salaries. As of January 1, 2025, New Hampshire became fully income-tax-free when the Interest and Dividends Tax was repealed. Previously, New Hampshire taxed only interest and dividend income, never wages.
Tax Status
| Category | Status |
|---|---|
| Wage/Salary Tax | None (never had one) |
| Interest & Dividends Tax | Repealed (effective January 1, 2025) |
| Withholding Required | No |
No Withholding Required
Employers with employees working in New Hampshire:
- Do not withhold New Hampshire state income tax
- Do not need to file New Hampshire income tax withholding returns
- Do not need to register for New Hampshire income tax withholding
Special Considerations
Tax History
New Hampshire historically had an Interest and Dividends Tax (I&D Tax) that applied to:
- Interest income
- Dividend income
- Capital gains from sales of securities
This tax never applied to wages, salaries, or earned income. The I&D Tax was phased out over several years and fully repealed effective January 1, 2025.
Business Taxes
While New Hampshire has no personal income tax on wages, employers should be aware of business-level taxes:
Business Profits Tax (BPT):
- Rate: 7.5%
- Applies to business income, not wages paid
Business Enterprise Tax (BET):
- Rate: 0.55%
- Based on business value (including wages paid)
- Functions as an alternative minimum tax
Multi-State Employees
For employees who work in both New Hampshire and an income tax state:
- Withhold taxes only for the income tax state
- Allocate wages based on work location
- No New Hampshire withholding regardless of allocation
Resident Employees Working Out of State
New Hampshire residents working in states with income tax may owe tax to those states. However, neighboring states with income tax (Maine, Massachusetts, Vermont) may have special rules for New Hampshire commuters.
W-2 Reporting
Even though no state income tax is withheld:
- Report New Hampshire wages in Box 16 (State wages) if desired for tracking
- Leave Box 17 (State income tax) blank or zero
- Use NH as the state abbreviation in Box 15