Frequently Asked Questions - Interest & Dividend Tax

• What is the Interest and Dividends Tax (I&D Tax)?
• Who pays it?
• Who must file a return?
• How does Special Session House Bill 1 of 2010 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?
• 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 tax on interest and dividend income.

Please note that the I&D Tax is being phased out. The I&D Tax rate is 5% for taxable periods ending before December 31, 2023. That rate is 4% for taxable periods ending on or after December 31, 2023, and 3% for taxable periods ending on or after December 31, 2024. The I&D Tax shall be repealed for taxable periods beginning after December 31, 2024.

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, and associations 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.

Who must file a return?

Individuals: Individuals who are residents or inhabitants of New Hampshire for any part of the tax year must file a return if they received more than $2,400 of gross interest and/or dividend income for a single individual or $4,800 of such income for a married couple filing a joint New Hampshire return. Part year residents must file a return if, during the entire year, their gross taxable income was over $2,400 (or over $4,800 for joint filers).

Partnerships, LLCs, and Estates: See separate tables on pages 6 and 7 of the instructions for form DP-10 regarding "WHO" and “WHAT” is taxable.

How does Special Session House Bill 1 of 2010 affect me?

• Individuals
• Entities

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 I&D Tax return, Form DP-10, is due on the 15th day of the 4th month following the end of the taxable period. The Form DP-10 and Form DP-10-ES Estimates may be obtain from the Department's website or by calling the Forms Line at (603) 230-5001.

 

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 and 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.

Are distributions from Trusts taxable?

For taxable periods ending before December 31, 2013, 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).

For taxable periods ending on or after December 31, 2013, interest and dividend income received by estates held by trustees treated as grantor trusts under section 671 of the United States Internal Revenue Code shall be included in the return of their grantor, to the extent that the grantor is an inhabitant or resident of New Hampshire. Income reported by, and taxed federally as interest or dividends to, a trust beneficiary who is an individual inhabitant or resident of New Hampshire with respect to distributions from a trust that is not treated as a grantor trust under section 671 of the United States Internal Revenue Code shall be included as interest or dividends in the return of such beneficiary and subject to taxation in accordance with the provisions of RSA Chp. 77.

 

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 New Hampshire Department of Revenue Administration 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 percentage of time in New Hampshire than elsewhere; have you advised a federal, state or local agency you are a resident; are you registered to vote in New Hampshire; do you have a New Hampshire driver's license?

How do I know if my pension plan is a qualified Tax Deferred Investment Plan?

Certain Tax Deferred Investment Plans are reportable to New Hampshire, but may not be taxable. You may contact your plan administrator for details about your plan.

Who do I contact with questions?

Call Taxpayer Services at (603) 230-5920.