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Tool | September 2014

State-by-State Guide to Taxes on Retirees

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New Hampshire

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The Bottom Line
Map of New Hampshire

MIXED TAX PICTURE

The Granite State depends more on property taxes for revenue than most states because there are no general income taxes or sales taxes. It also receives substantial revenue from taxes on motor fuels, tobacco products and alcoholic beverages sold through state liquor stores. The state income tax is limited to a 5% tax on dividends and interest; a $1,200 exemption is available for residents 65 or older. Seniors can also defer some property taxes, subject to income and asset limitations. According to a study by the Lincoln Institute of Land Policy and the Minnesota Taxpayers Association, New Hampshire's net real estate taxes rank fourth-highest in the nation.

State Sales Tax

There’s no general state sales tax. There are, however, some specific sales taxes: 9% on restaurants, prepared foods, hotel rooms and car rentals; 55 cents per megawatt hour on electricity; 7% on telecommunication services; and additional taxes on real estate transfers and alcohol.

Income Tax Range

New Hampshire doesn’t have an income tax. But there’s a 5% tax on dividends and interest in excess of $2,400 for individuals ($4,800 for joint filers).

Social Security

Benefits are not taxed.

Exemptions for Other Retirement Income

Retirement income is not taxed. A $1,200 exemption is available for residents 65 or older for taxable dividends and interest.

Property Taxes

Property taxes are assessed, levied and collected by municipalities. A state education property tax rate is assessed on all New Hampshire property owners (for 2013, the rate was $2.44 per $1,000 of value).

Median property tax on the state's median home value of $249,700 is $4,636, according to the Tax Foundation.

Tax breaks for seniors: An elderly exemption for property taxes is available to those age 65 and older who have lived in New Hampshire for at least five years. Towns and cities set additional eligibility rules, but the minimum exemption is $5,000 off the assessed home value. Property taxes can be deferred but accrue interest at the rate of 5% per year. The deferred property tax may not exceed 85% of the equity value of the residence. The deferral is available (if granted by the assessing officials) to any resident property owner who is at least 65 years old.

To be eligible for the Low and Moderate Income Homeowner's Property Tax Relief program in New Hampshire, you must own a home subject to the state education property tax, reside in the home as of April 1 of the year for which the claim for relief is made, and have a total household income of $20,000 or less if single or $40,000 or less if married or head of a household.

Inheritance and
Estate Taxes

There is no inheritance tax or estate tax.

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