New Hampshire Interest and Dividends Tax Requirements

The New Hampshire Interest and Dividends (I&D) Tax is a state-level tax applied to specific investment income. Unlike a broad income tax on wages, which New Hampshire does not have, this tax targets the earnings individuals, partnerships, and fiduciaries generate from their investments. It is calculated based on the amount of interest and dividend income a taxpayer receives within a taxable year, after certain exemptions and deductions are applied.

This tax is distinct from federal income tax obligations and is administered by the New Hampshire Department of Revenue Administration (DRA). The I&D tax is currently being phased out and will be fully repealed.

Who is Required to File

A person’s obligation to file a New Hampshire I&D tax return is determined by their gross income from these sources and their residency status. For the 2024 tax year, an individual must file if their gross interest and dividend income exceeds $2,400. This threshold doubles to $4,800 for those filing a joint return. These filing thresholds apply to individuals, as well as to partnerships, limited liability companies, and associations that earn this type of income.

Residency is a primary factor in determining filing requirements. Full-year residents of New Hampshire are subject to the tax on their interest and dividend income from all sources. Part-year residents are also required to file if they meet the income thresholds during their period of residency. Fiduciaries managing estates or trusts established in New Hampshire or for the benefit of New Hampshire residents must also file if the entity’s gross interest and dividend income surpasses the $2,400 threshold.

Non-residents typically do not have a direct filing obligation unless they are beneficiaries of a New Hampshire-based trust or partners in a partnership that distributes such income. In those cases, the income passed through to them may be subject to the tax.

Calculating Your Taxable Income

The calculation of your taxable income begins with summing all interest and dividend income received during the year. This figure is your gross income, which is reported on federal forms such as the 1099-INT and 1099-DIV. From this total, you must distinguish between what is taxable and what is exempt under New Hampshire law. Taxable income includes interest from bank accounts, dividends from corporations, and interest from corporate bonds.

Certain types of income are specifically exempt and can be subtracted from your gross income total. For example, interest from direct obligations of the United States government, such as U.S. Treasury bonds, is not taxable. Similarly, interest from obligations of the State of New Hampshire and its political subdivisions is also exempt.

After determining your net interest and dividend income, you apply standard exemptions to further reduce the taxable base. Every filer is entitled to a personal exemption of $2,400. Additional exemptions of $1,200 each are available for residents who are 65 years of age or older, are legally blind, or are disabled and unable to work. These additional exemptions are stackable; for instance, a resident who is over 65 and also legally blind can claim two $1,200 exemptions for a total of $2,400, in addition to the standard personal exemption.

How to File and Pay the Tax

To file, you must gather all necessary financial documents, including your federal Form 1099-INT and Form 1099-DIV statements. The primary state form for this tax is the Form DP-10, which can be downloaded from the New Hampshire Department of Revenue Administration (DRA) website. This form guides you through the calculation of your tax liability, incorporating the necessary subtractions for exempt income and personal exemptions.

The completed Form DP-10 must be submitted by the annual tax deadline, which is April 15th. Taxpayers have the option to file electronically through approved tax software or mail the physical paper form to the address specified in the form’s instructions. If you cannot meet the deadline, you can file for an extension, but any tax owed must still be paid by the original due date to avoid penalties and interest.

Payment of any tax due can be made electronically through the state’s online payment portal or by mailing a check with a payment voucher. For taxpayers who anticipate their I&D tax liability will exceed $500 for the year, the state requires quarterly estimated tax payments. These payments are due on:

• April 15
• June 15
• September 15
• January 15 of the following year

The Phase-Out and Repeal of the Tax

Legislation enacted in recent years has put the New Hampshire Interest and Dividends Tax on a path to complete elimination. This process began as a gradual phase-out, with the tax rate decreasing incrementally each year. The rate reduction schedule provides a clear timeline for the tax’s elimination. For tax years ending on or after December 31, 2023, the rate was reduced to 4%, and for the 2024 tax year, the rate was further reduced to 3%.

This downward trend culminates in the tax being fully repealed for any income earned on or after January 1, 2025. As a result, tax returns filed in 2026 for the 2025 tax year will no longer include the I&D tax. Despite the repeal, taxpayers must adhere to their filing obligations for all taxable periods up to and including the 2024 tax year.

If you meet the filing thresholds for 2024, you are still required to file a Form DP-10 and pay the 3% tax by the April 2025 deadline. The DRA will continue to have the authority to audit and collect taxes for these prior periods even after the tax is officially off the books. Starting with the 2025 tax year, estimated tax payments for the I&D tax should not be made.