New Hampshire has no income tax on wages — never has. Your paycheck is reduced only by federal income tax and FICA. Keep more of every dollar you earn.
New Hampshire previously had a 5% tax on interest and dividend income — but not wages. That I&D tax was phased out at 1% per year and reached 0% as of January 1, 2025. New Hampshire residents now pay zero state income tax on wages, salaries, self-employment income, dividends, and interest. Your paycheck deductions are federal income tax + Social Security (6.2%) + Medicare (1.45%) only.
New Hampshire's famous motto isn't just philosophy — it's fiscal policy. The state has never enacted a broad income tax on wages. This makes New Hampshire one of only nine states with no income tax on wages, alongside Texas, Florida, Nevada, Washington, Tennessee, South Dakota, Wyoming, and Alaska. For workers in high-income professions — tech, finance, healthcare, law — choosing New Hampshire over Massachusetts can mean keeping $5,000–$15,000+ per year that would otherwise go to state income taxes.
The Boston commuter advantage — and the pandemic-era shift. Southern New Hampshire (Manchester, Nashua, Salem, Derry) has long been a bedroom community for Boston workers who want to live in a no-income-tax state while earning Massachusetts salaries. The arrangement requires working in MA and living in NH, since Massachusetts income tax applies to wages earned in Massachusetts regardless of where you live. During the pandemic, many NH residents worked remotely from home — triggering debates about whether Massachusetts could tax remote NH workers. The Massachusetts Supreme Judicial Court ultimately sided with Massachusetts in many cases, but remote work that's genuinely performed in New Hampshire is not subject to Massachusetts income tax. This subtle distinction matters enormously for high earners.
The elimination of the Dividend & Interest (I&D) tax removed the last income tax in NH. For years, New Hampshire had one holdout: a 5% tax on dividend and interest income. This affected retirees, investors, and business owners with significant passive income. Governor Sununu signed a phaseout into law, reducing the rate from 5% (2021) to 4% (2022), 3% (2023), 2% (2024), 1% (2025), and 0% in 2026+. The I&D tax is now fully eliminated. New Hampshire residents with investment income, dividend payments, and interest income also owe zero state tax on those amounts.
New Hampshire funds state government through property taxes (among the highest in New England), meals and rooms taxes, business taxes, and fees — not income taxes. New Hampshire has no statewide sales tax either, making it a popular shopping destination from neighboring states with sales taxes (Maine 5.5%, Vermont 6%, Massachusetts 6.25%). The overall tax burden — including property taxes — can be higher in NH than it appears from the income tax alone. High-income professionals in lower-value homes still come out ahead by avoiding income tax; retired homeowners on fixed incomes may pay more in property taxes than they would save on income taxes.
No NH state income tax on wages. Only federal income tax, SS (6.2%), and Medicare (1.45%) are deducted. Consult a tax professional for advice.
| Gross Pay (this check) | $0.00 |
| Federal Income Tax | −$0.00 |
| New Hampshire State Tax | $0.00 ✓ |
| Social Security (6.2%) | −$0.00 |
| Medicare (1.45%) | −$0.00 |
| Net Take-Home Pay | $0.00 |
No. New Hampshire has never had a state income tax on wages or salaries. The only income tax NH had was the Interest and Dividends (I&D) tax, which applied only to dividend and interest income — not wages. That tax was fully phased out in 2025. Starting in 2026, New Hampshire has zero income tax on any income source — wages, dividends, interest, capital gains, or self-employment income.
Only federal income tax and FICA (Social Security + Medicare) are deducted from New Hampshire paychecks. Social Security is 6.2% up to the 2026 wage base of $184,500. Medicare is 1.45% on all wages, plus an additional 0.9% on wages above $200,000 (single) / $250,000 (married). Federal income tax depends on your W-4 withholding elections and filing status.
Massachusetts. If you physically work in Massachusetts — driving over the border to a Massachusetts employer — Massachusetts income tax (flat 5% standard rate, plus 4% surtax above $1 million) applies to your Massachusetts wages. Living in New Hampshire does not exempt you from Massachusetts income tax on wages earned in Massachusetts. The commuter advantage works in reverse: you save NH income tax (which is $0 anyway), but you still owe MA income tax. Remote workers who perform work entirely from their New Hampshire home for a Massachusetts company may be able to argue their income is sourced to New Hampshire — but this depends on specific facts and has been litigated.
New Hampshire relies on property taxes (among the highest in New England per dollar of home value), business taxes, meals and rooms taxes, tobacco taxes, lottery revenue, and federal funds. The absence of income and sales taxes shifts the burden toward property owners — which is why New Hampshire's property tax bills can be higher than neighboring states. For high-income earners, the trade-off strongly favors New Hampshire. For retired homeowners on fixed incomes, higher property taxes can partially offset income-tax savings.
The I&D tax was a 5% flat tax on dividend and interest income received by New Hampshire residents. It applied to stock dividends, bond interest, savings account interest, and certain business distributions — but never to wages, salaries, or self-employment income. Governor Chris Sununu signed it into a phasedown in 2021: 5% (2021) → 4% (2022) → 3% (2023) → 2% (2024) → 1% (2025) → 0% (2026+). As of January 1, 2026, the I&D tax is fully eliminated. New Hampshire now has zero state income tax on any form of income.
At $100,000 in wages, Massachusetts income tax costs approximately $5,000 per year (5% rate × $100k, roughly). At $150,000, the cost is approximately $7,500/year. At $200,000, roughly $10,000/year. Moving from Massachusetts to New Hampshire while keeping the same job (and working remotely from NH, or working for an NH employer) saves those amounts in state income tax per year. The savings compound significantly for tech workers, finance professionals, and executives earning $200,000+.
No. New Hampshire has no statewide sales tax on goods. This makes NH a shopping destination for residents of Maine, Vermont, and Massachusetts, who sometimes cross the border specifically to buy large items tax-free. The combination of no income tax and no sales tax makes New Hampshire distinctive in New England — though the state does have excise taxes on meals and rooms, tobacco, alcohol, and vehicle registrations.
No state income tax means no New Hampshire state tax on overtime or tips. The federal exemptions under the One Big Beautiful Bill (up to $25,000 for tips, up to $12,500 for overtime premium) still apply to reduce your federal income tax. New Hampshire residents get the full federal savings with no offsetting state impact. See our Tips Tax Calculator and Overtime Tax Calculator for federal savings amounts.