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Frequently Asked Questions > What is the Interest and Dividends Tax?
 
 

What is the Interest and Dividends Tax (I&D Tax)?
Who pays it?
How does Special Session House Bill 1 affect me?
Are there any tax exemptions that apply?
When is the I&D Tax return due?
Do I have to make estimated payments?
Do I have to report distributions from S corporations?
Are distributions from an organization that is a member of a combined group subject to the I&D Tax?
Do I have to report portfolio income, gains and losses?
Are distributions from Trusts taxable?
Is interest and dividends from College Investment Savings Plans taxable to New Hampshire under the I&D Tax?
Why did I receive a NH Form 1099-G and what should I do with it?
Are liquidating dividends taxable?
My spouse lives in another state, do I have to file a joint return?
What factors are used to determine if I am a resident of New Hampshire?
How do I know if my pension plan is a qualified Tax Deferred Investment Plan?
Who do I contact with questions?

What is the Interest and Dividends Tax (I&D Tax)?
It is a 5% tax on interest and dividends income.

Who pays it?
All New Hampshire residents and fiduciaries whose gross interest and dividends income, from all sources, exceeds $2,400 annually ($4800 for joint filers). In addition, limited liability companies, partnerships, associations and trusts with non-transferable shares whose gross interest and dividends income, from all sources, exceeds $2,400 annually must also file and pay I&D Tax.

How does Special Session House Bill 1 affect me?

Are there any tax exemptions that apply?;
Yes. There is an exemption for income of $2,400. A $1,200 exemption is available for residents who are 65 years of age or older. A $1,200 exemption is available for residents who are blind regardless of their age. And, a $1,200 exemption is available to disabled individuals who are unable to work, provided they have not reached their 65th birthday.

When is the I&D Tax return due?
The return is due on the 15th day of the 4th month following the end of the taxable period. The Interest & Dividends Tax Booklet may be downloaded from the Department's website. It includes Form DP-10 Return and Form DP-10-ES Estimates.

Do I have to make estimated payments?
For calendar year filers whose I&D tax liability will exceed $500 ($200 prior to 2004), estimated tax payments, paid at 25% each, are due on April 15, June 15 and September 15 of the current calendar year, and January 15 of the subsequent calendar year. For fiscal year filers, estimates are due on the 15th day of the 4th, 6th, 9th & 12th month of the taxable period.

Do I have to report distributions from S corporations?
Yes, you must report all such distributions, including non-cash distributions, on Page 2, Line 2 of the New Hampshire I&D Tax return. If any part of a distribution is not subject to tax, you would deduct the appropriate amount on Page 2, Line 4.

Are distributions from an organization that is a member of a combined group subject to the I&D Tax?
Yes, if the distribution is made to a NH Resident.

Do I have to report portfolio income, gains and losses?
Yes, you must report your portfolio income, gains and losses in Page 2, Line 2 of the New Hampshire I&D Tax return, but then you deduct them on Page 2, Line 4.

Are distributions from Trusts taxable?
If the trust has transferable shares (i.e. if you can freely transfer your shares without causing a dissolution of the trust) the entire distribution received by a NH resident is taxable. If the trust has non transferable shares, the trust itself is subject to tax on the interest and dividends it receives (and distributions from the trust are not taxable to the recipients.)

Is interest and dividends from College Investment Savings Plans taxable to New Hampshire under the I&D Tax?
No.

Why did I receive a NH Form 1099-G and what should I do with it?
The NHDRA is required by the Internal Revenue Service to notify any non-corporate taxpayer by January 31, of activity in the prior year that was a refund, credit or offset of taxes based on income. If a refund is indicated you will have received a corresponding check. A credit is an overpayment, which is applied to another tax period. An offset is an overpayment that is applied to a tax notice. We must also provide the information to the IRS, and you may be required to report all or part of the amount of the New Hampshire Form 1099-G as income on your federal return. Give the form to your preparer, if you have one; or review the instructions in your federal tax booklet for the proper federal treatment.

Are liquidating dividends taxable?
No.

My spouse lives in another state, do I have to file a joint return?
No. If one spouse is not a resident, the resident spouse shall file a return alone and report his or her interest and dividend income, and 50% of the interest and/or dividends from jointly held investments.

What factors are used to determine if I am a resident of New Hampshire?
Factors include, but are not limited to: Do you maintain a home, spending a greater percent of time in New Hampshire than elsewhere; Have you advised a state or local agency you are a resident; Are you registered to vote in New Hampshire; Are you licensed to drive in New Hampshire?

How do I know if my pension plan is a qualified Tax Deferred Investment Plan?
Certain Tax Deferred Investment Plans are reportable to NH, but may not be taxable. You may contact your plan administrator for details about your plan or visit the web site of the US Department of Labor Frequently Asked Questions About Pension Plans and ERISA at: http://www.dol.gov/ebsa/faqs/faq_compliance_pension.html.

Who do I contact with questions?
Call Taxpayer Services at (603) 230-5920. Requests for corrections to your account must be sent to Document Processing Resolutions, PO Box 1004, Concord, NH 03302-1004.

 


 

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