Taxable Income Under NH Law

[T.H.E. Binz]

In contemplating a change in residence to our beloved Granite State, I'm a bit confused about the state income tax. I understand how interest income and dividend income is taxed, i.e., 5% unless it falls under an exempt category like IRA or 401(k) interest. What is unclear is how regular commercial annuity, variable annuity, or pension income is treated. Does virtually any income that shows up on a 1099-R Form subject to the NH income tax or are there commonly used income producing annuity assets that are exempt from the NH income tax.

[DRH]

Originally Posted by T.H.E. Binz

In contemplating a change in residence to our beloved Granite State, I'm a bit confused about the state income tax. I understand how interest income and dividend income is taxed, i.e., 5% unless it falls under an exempt category like IRA or 401(k) interest. What is unclear is how regular commercial annuity, variable annuity, or pension income is treated. Does virtually any income that shows up on a 1099-R Form subject to the NH income tax or are there commonly used income producing annuity assets that are exempt from the NH income tax.

This "Checklist", which is part of the NH Interest & Dividend tax package, should help answer your questions. I know that pension income is not taxed in NH. It appears that annuity income is taxable in NH, but perhaps another Forum member who may be a CPA or tax consultant could comment specifically on that.

[MJM]

http://www.revenue.nh.gov/faqs/dra_900.htm