New Hampshire has 0% state income tax on wages, salaries, and business income - making it one of only 9 US states with no income tax (TX, FL, TN, WY, SD, NV, AK, WA, NH). At $100K income, you pay $0 state tax - significantly better than Vermont (3.35-8.75%), Maine (5.8-7.15%), Massachusetts (5%), and Connecticut (3-6.99%). This makes NH the most tax-efficient state in New England.
History - Interest & Dividends Tax repealed January 1, 2025: New Hampshire was unique among no-income-tax states until 2025: it had 0% tax on wages BUT levied an Interest & Dividends Tax (I&D Tax) on investment income (interest, dividends) for residents. The tax was phased down: 5% (through 2022) → 4% (2023) → 3% (2024) → fully repealed effective January 1, 2025 by HB 2 (2023 session). Result: As of 2026, NH has NO income tax of any kind - not on wages, not on investment income, not on capital gains. This makes NH competitive with FL/TX/TN for retirees with substantial investment portfolios.
How it compares regionally:
The tradeoff - property tax funds everything: New Hampshire's 0% income tax + 0% sales tax (NH also has no state sales tax) means the state relies heavily on property tax (1.50% average statewide, 5th-highest nationally — New Jersey and Illinois tied for #1 at 1.88%, Connecticut #3 at 1.54%, Vermont #4 at 1.51%). At $450K Manchester home: $6,750/year property tax ($450,000 x 1.50%). This creates a wealth-based tax system favoring high-income renters over middle-income homeowners. Additionally, NH has 7.5% Business Profits Tax (BPT) and 0.55% Business Enterprise Tax (BET) on business income, generating $1.2B annually to fund state operations. NH ranks 41st in K-12 education spending (heavy local control, wealthy towns spend more), 38th in healthcare quality, 25th in infrastructure - lower-middle outcomes due to limited state revenue.
The Massachusetts border arbitrage - 'Live Free or Die' tax dodge: New Hampshire's economy benefits enormously from Boston commuters who live in NH (0% income tax) and work in MA (5% income tax). Massachusetts taxes nonresidents on MA-source wages: NH residents working in MA pay MA income tax (5% rate) BUT save on housing costs (Nashua $485K vs Boston $825K = $340K cheaper). At $150K Boston job: Pay about the same MA income tax ($7,180) living in NH or MA, AND pay just $7,275 property tax (1.50% × $485K) vs $8,250 MA property tax (1% × $825K) = net LOWER property tax by $975 too. Combined with the $340K cheaper home purchase, NH is decisively cheaper long-term. Estimated 68,000 NH residents commute to MA daily, driving NH's southern tier economy (Nashua, Salem, Portsmouth border region).
Source: New Hampshire Department of Revenue - Tax Information
Here's what New Hampshire residents actually pay at different income levels (2026, single filer, standard deduction):
| Annual Income | Federal Tax | State Tax | Total Tax | Take-Home Pay | Effective Rate |
|---|---|---|---|---|---|
| $50,000 | $3,820 | $0 | $3,820 | $46,180 | 7.6% |
| $75,000 | $7,670 | $0 | $7,670 | $67,330 | 10.2% |
| $100,000 | $13,170 | $0 | $13,170 | $86,830 | 13.2% |
| $150,000 | $24,734 | $0 | $24,734 | $125,266 | 16.5% |
| $250,000 | $51,304 | $0 | $51,304 | $198,696 | 20.5% |
Note: Includes federal and state income tax only. Does not include FICA (Social Security/Medicare), which adds 7.65% for employees.
Key takeaway: At $100K, New Hampshire takes $0 in state tax alone.
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Migration Trends: According to U.S. Census Bureau data (2021-2022), New Hampshire experienced net immigration of 5,830 residents (strong inflow from high-tax states). Top origin states were:
Outflow: New Hampshire lost residents to:
Why people move to New Hampshire: 0% income tax (saves $4,000-17,000/year for $100-250K earners vs MA/VT/ME), 0% sales tax (saves $3,000/year on $50K spending vs 6.25% MA), MA border arbitrage (live NH, work Boston: you still pay MA tax on MA wages but save on housing and sales tax), outdoor lifestyle (White Mountains skiing, Lakes Region summer, fall foliage tourism), 'Live Free or Die' libertarian culture (minimal government, no helmet laws, constitutional carry guns), excellent public schools in wealthy towns (Hanover, Bedford, Hollis rank top 1% nationally), Portsmouth seacoast charm, safe (2nd-lowest crime rate nationally).
Why people leave New Hampshire: HIGH property tax (1.50% average, 5th nationally = $6,750 on $450K home), lower salaries than MA (NH median $88K vs MA $96K - 8% gap), limited urban amenities (Manchester 195K metro feels small, Boston 1hr away for culture), harsh winters (-15°F January, 60+ inches snow annually), expensive housing despite tax savings (median $450K statewide, southern tier $485-550K due to MA commuter demand), regressive tax structure hurts middle class (property tax hits homeowners hard, high earners benefit most from 0% income tax).
Tax considerations if moving here: NH residency = 183+ days OR domicile test (no state filing required for wage earners). 0% income tax on wages/salaries/business income. 0% sales tax (NH also has no state sales tax). Property tax 1.50% average (HIGH - varies 1.5-2.8% by town, wealthy towns like Hanover 2.2%, rural towns 1.6%). Estimated $6,750/year on $450K Manchester home ($450,000 × 1.50%). Meals & Rooms Tax 8.5% (restaurant/hotel tax, tourists pay, not residents). Business taxes: 7.5% Business Profits Tax (BPT) on C-corps/partnerships, 0.55% Business Enterprise Tax (BET) on business income. No tax on Social Security, pensions, 401k, IRA (I&D Tax fully repealed from January 1, 2025). No estate tax, no inheritance tax. Result: NH is BEST for high-income workers $150K+ (save about $7,000-20,000/year vs MA/CT/NY for income not earned in MA), retirees with investment income (I&D Tax repealed 2025), MA commuters (MA still taxes MA wages; savings come from housing and sales tax). WORST for middle-income homeowners $60-100K (property tax $6-9K hurts more than income tax savings).
| State | Tax Rate | Tax on $100K Income | Difference from New Hampshire |
|---|---|---|---|
| New Hampshire | 0% | $0 | Baseline |
| Massachusetts | 5% flat | $4,680 | +$4,680 (more tax) |
| Vermont | 3.35-8.75% | $4,076 | +$4,076 (more tax) |
| Maine | 5.8-7.15% | $5,129 | +$5,129 (more tax) |
| Connecticut | 3-6.99% | $4,975 | +$4,975 (more tax) |
Key insight: New Hampshire's 0% income tax is unbeatable in New England. At $100K income, NH saves $4,076-5,129 annually vs all neighbors (MA/VT/ME/CT). However, NH's high property tax (1.50% average) offsets savings for homeowners. At $100K income + $450K home: NH pays $0 income + $6,750 property ($450,000 × 1.50%) = $6,750 total. Massachusetts (Boston $825K home): $4,680 income + $8,250 property (1% × $825K) = $12,930 total. Result: NH saves $6,180/year even with higher property tax rate, PLUS saves $375K on cheaper home purchase ($450K vs $825K).
Total tax burden at $100K + median home: New Hampshire (Manchester $450K): $0 income + $6,750 property (1.50%) + $0 sales = $6,750 total (6.8%). Massachusetts (Boston $825K): $4,680 income + $8,250 property (1%) + $3,125 sales (6.25%) = $16,055 (16.1%). Vermont (Burlington $400K): $4,076 income + $6,040 property (1.51%) + $3,000 sales (6%) = $13,116 (13.1%). Result: NH's 6.8% total burden is LOWEST in region despite high property tax. MA costs 138% more annually ($9,305 more), VT 94% more ($6,366 more). NH wins decisively for tax burden.
The Massachusetts question - Should I move to NH and commute to Boston? At $150K Boston job: Live MA = $7,180 income tax + $8,250 property (1% × $825K) + $3,125 sales = $18,555 (12.4%). Live NH Nashua/Salem = $7,180 MA income tax (NH residents pay MA tax on MA wages) + $7,275 property (1.50% × $485K) + $0 sales = $14,455 (9.6%). NH saves $4,100/year + $340K cheaper home ($485K vs $825K). Commute cost: 1hr each way, $300/month gas/tolls = $3,600/year. Net: NH still saves about $500/year even after commute costs, on top of the $340K cheaper home equity. Analysis: NH wins decisively on the numbers (lower taxes, lower commute-adjusted annual cost, and a cheaper home) - the only real tradeoff is the 2hr daily commute's quality-of-life cost, not a financial one. NH wins for: remote workers (no commute), families prioritizing space ($485K buys 2,500 sqft vs 1,200 sqft Boston), people tolerating commute. MA wins for: urban lifestyle, career growth (Boston networking), avoiding commute.
Yes, NH residents working in MA pay Massachusetts income tax (5% rate) on MA-source wages, because Massachusetts taxes nonresidents on income earned there. Example: Live Nashua NH, work Boston MA, earn $150K = pay about $7,180 MA income tax (after the MA personal exemption). You DO NOT pay NH income tax (NH has 0%). File MA nonresident return (Form 1-NR). The benefit: You save on housing (Nashua $485K vs Boston $825K = $340K cheaper), no NH sales tax (saves $3,000/year on $50K spending vs 6.25% MA), and access to NH property tax deduction on federal return (SALT cap $40,400 for 2026). Estimated 68,000 NH residents commute to MA daily for this arbitrage. Only works if savings on housing/sales tax > commute costs ($3,600/year gas/tolls).
New Hampshire's Interest & Dividends Tax (I&D Tax) was FULLY REPEALED effective January 1, 2025. Previously, NH taxed investment income (interest, dividends) for residents earning over $2,400 annually ($4,800 married). HB 2 (2023 session) accelerated the phase-out: 5% (through 2022) → 4% (2023) → 3% (2024) → 0% (January 1, 2025). As of 2026, NH has NO income tax of any kind. Example: Retiree with $80K pension + $40K dividends = $120K total. In 2024: $0 tax on pension, $1,128 tax on dividends (3% × $37,600 over $2,400 threshold). Post-2024: $0 tax on everything. This makes NH extremely competitive with FL/TX for wealthy retirees and investors.
New Hampshire's 1.50% average property tax (5th-highest nationally - New Jersey and Illinois tied for #1 at 1.88%, Connecticut #3 at 1.54%, Vermont #4 at 1.51%) results from funding state/local services entirely through property tax and business taxes (no income tax, no sales tax). At $450K Manchester home: $6,750/year property tax ($450,000 × 1.50%). NH constitution prohibits broad-based taxes, forcing reliance on property tax. Education funding: NH ranks 41st in state K-12 spending (heavy local control), forcing wealthy towns to levy high property taxes to fund schools (Hanover 2.2%, Bedford 2.1%). This creates regressive structure: middle-income homeowners pay higher % of income than high-income renters. Business taxes (7.5% BPT, 0.55% BET) generate $1.2B annually but only cover 18% of state budget. Property tax covers rest. Result: NH structure favors high earners (benefit from 0% income tax) over middle-class homeowners (crushed by property tax).
No, NH is NOT tax-free - it has 0% income tax and 0% sales tax, but has HIGH property tax and several other taxes. Taxes you WILL pay: Property tax 1.50% average ($6,750 on $450K home, 5th-highest nationally), Meals & Rooms Tax 8.5% (restaurants/hotels), Vehicle registration $31-$106/year, Business Profits Tax 7.5% (if you own C-corp/partnership), Business Enterprise Tax 0.55% (on business income), Real Estate Transfer Tax 0.75% (on home sales). Federal taxes apply (10-37% income tax, 6.2% Social Security, 1.45% Medicare). At $100K + $450K home + $50K spending: $0 income + $6,750 property + $850 meals (2% of spending) + $70 vehicle = $7,670 state/local taxes (7.7% of income). This beats MA (16.1%) and VT (13.1%), but NH's 'tax-free' reputation is misleading. Reality: NH shifts burden from income earners to property owners.
Both have 0% income tax. Using New Hampshire's correct 1.50% average property tax rate, New Hampshire actually has the LOWER total tax burden of the two - Florida no longer wins on pure tax optimization. New Hampshire (Manchester $450K home, $100K SS + $50K dividends retirement income): $0 income tax + $6,750 property (1.50%) + $0 sales = $6,750 (4.5% of $150K). Florida (Tampa $420K home, same income): $0 income tax + $4,200 property (1% × $420K after homestead exemption) + $2,940 sales (7% × $42K spending) = $7,140 (4.8%). NH now saves $390/year vs FL on tax burden alone. NH advantages: lower total tax burden (4.5% vs 4.8%), 4 seasons, proximity to Boston culture, no hurricanes, better healthcare (Dartmouth-Hitchcock), White Mountains outdoor recreation. FL advantages: warmer climate (year-round golf), no estate tax, larger retiree community. Recommendation: NH now wins on both tax optimization AND seasons/culture/Boston access. FL remains the better choice mainly for climate preference and community size, not tax savings.
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How we calculate: New Hampshire has 0% state income tax on all wage, salary, and business income as of 2026. Our calculator shows $0 state tax at all income levels and adds federal income tax using official 2026 IRS brackets. Effective tax rates are calculated by dividing total tax by gross income. For comparison purposes, we show neighboring states' tax calculations at the same income levels using their official 2026 tax brackets and rates. Note: NH's Interest & Dividends Tax was fully repealed January 1, 2025 (was 3% in 2024), so investment income is also 0% taxed at state level from 2025 onwards.
Data sources: New Hampshire Department of Revenue: revenue.nh.gov - Confirmation of 0% income tax on wages, HB 2 (2023) I&D Tax repeal (fully repealed January 1, 2025), Business Profits Tax (7.5%), Business Enterprise Tax (0.55%). IRS: Federal tax brackets 2026. U.S. Census Bureau: Migration data (2021-2022), median household income ($88,000 NH). Zillow: Median homes (Manchester $450K, Nashua $485K, January 2026). NH Municipal Association: Property tax rates by town (1.50% statewide average, varies 1.5-2.8%).
Verification: New Hampshire's 0% income tax verified against NH Revised Statutes Annotated (RSA) §77 (no broad-based income tax). Interest & Dividends Tax repeal verified against HB 2 (2023) and NH DRA guidance (fully repealed Jan 1, 2025). Federal brackets verified against IRS Revenue Procedure 2025-58. Migration data from IRS SOI via Census Bureau. Property/meals tax from NH Department of Revenue 2025 report. Housing data from Zillow (January 2026). MA taxation of nonresident wages verified against MA DOR nonresident guidance (NH residents pay MA tax on MA-source wages).
Limitations: Assumes NH full-year residency, W-2 wage income only, no investment income (I&D Tax repealed 2025 so irrelevant). Does not include: property tax variations by town (1.5-2.8%, wealthy towns higher), Meals & Rooms Tax (8.5% on dining/hotels), Vehicle registration ($31-$106/year), Real Estate Transfer Tax (0.75% on home sales), Business Profits Tax (7.5% for C-corps/partnerships), Business Enterprise Tax (0.55% on business income), MA income tax for NH residents working in MA (5% on MA wages - affects 68K NH commuters). Does not include federal taxes beyond income tax (Social Security 6.2%, Medicare 1.45%). Consult licensed NH tax professional for: multi-state income (MA/VT commuters), business income (BPT 7.5%, BET 0.55%), real estate transactions (0.75% transfer tax), estate planning (no estate tax but consider federal estate tax for estates >$15M).
Last Updated: June 2026
Verified By: Daniel · CountryTaxCalc
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Last Updated: June 2026