A key part of planning for retirement is determining how much income you’ll need to meet your expenses, including understanding your taxable retirement income. Your income during retirement will likely come from a variety of sources, and you’re responsible for making sure the appropriate income taxes are paid.
New Hampshire legislators have voted to expedite the elimination of the state's Interest and Dividends Tax, moving the repeal date to January 1, 2025, instead of the originally planned 2027 sunset.
The repeal of New Hampshire's Interest and Dividends Tax would make the state more financially attractive to retirees in several ways:
Tax-Free Retirement Income
Without the Interest and Dividends Tax, retirees would pay no state taxes on:
- Income from their investment portfolios
- Dividend payments from stocks
- Interest from bonds and savings accounts
- Other passive investment income
Financial Planning Benefits
The repeal would offer retirees:
- More predictable retirement income without state tax considerations
- Potentially higher after-tax returns on their investments
- Greater flexibility in managing their retirement portfolios
This tax change, combined with New Hampshire's existing tax structure (no sales tax), could make it one of the most tax-friendly states for retirees in the Northeast. However, retirees should still consider other factors like property taxes (which are relatively high in New Hampshire), cost of living, healthcare access, and climate when making relocation decisions.