New Hampshire Repeals Interest and Dividends Tax: What It Means for Taxpayers
Written by Larry Hall
February 24, 2025
Effective January 1, 2025, New Hampshire taxpayers are no longer required to pay the state’s Interest and Dividends Tax. This repeal marks a significant shift in the state’s tax landscape, eliminating a levy that had been in place for over a century.
Background on the Interest and Dividends Tax
Originally enacted in 1923, the Interest and Dividends Tax applied to residents earning more than $2,400 in interest and dividend income as individuals or $4,800 for joint filers. The tax rate was gradually reduced in recent years, from 5% in 2023 to 3% in 2024, before being fully repealed in 2025.
Impact on Taxpayers
With the repeal, New Hampshire residents will no longer pay state taxes on income derived from interest payments, dividend distributions, or certain business entity distributions. This change is expected to provide substantial tax savings, particularly for retirees and investors who previously had to account for this tax in their financial planning.
However, taxpayers should note that taxable periods before December 31, 2024, remain subject to audit and collection. Any outstanding tax obligations for prior years must still be settled, and taxpayers required to file a 2024 Interest and Dividends Tax return must do so by the statutory deadline.
Next Steps for Taxpayers
New Hampshire taxpayers should review their financial and tax planning strategies in light of this repeal. While estimated tax payments for 2025 should not be filed, those who mistakenly made payments can request refunds by submitting a written request to the New Hampshire Department of Revenue Administration. Additionally, tax professionals can help clients navigate any remaining obligations for prior tax years and adjust their investment strategies accordingly.
Need Tax Help?
I’m Larry Hall, and I’m here to help. If you have tax questions, contact me at www.HallTaxPro.com.
Source: New Hampshire Department of Revenue Administration
This article is for informational purposes only and should not be considered professional tax advice. For guidance on your specific tax situation, consult a tax professional.
