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Understanding Personal Income Tax in New Hampshire

Filed under State Taxes. Fact checked on February 13, 2013.

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Rules regarding New Hampshire's tax on interest and dividends are discussed.

New Hampshire does not have a general personal income tax. However, you are subject to tax on the interest and dividends you receive.

You are also taxed on distributions from pass-through entities. Tax is imposed at the rate of 5 percent. Generally, each individual's first $2,400 of gross interest and dividends are not taxable ($4,800 for joint filers; add an extra $1,200 if you are blind or at least 65 years old).

Don't forget that your business may be subject to New Hampshire's business income taxes.

Partnerships. If you are a partner in a partnership you are not individually taxed on the income received from the partnership. Instead, your partnership is subject to the interest and dividends tax.

S corporations. New Hampshire does not recognize S corporation status. In New Hampshire, S corporation income is subject to business income taxes. Dividends and distributions are not taxable to the shareholders unless and until the dividends or accumulated profits are distributed to the shareholders.

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