Work in Maine, Live in New Hampshire: How Your Paycheck Is Taxed

Reciprocity

Do Maine and New Hampshire have a tax reciprocity agreement?

No. Maine offers no exemption to New Hampshire residents. Maine Revenue Services says anyone who is not a Maine resident but performs personal services in Maine for more than 12 days and earns more than $3,000 from all Maine sources must file a Maine return. Under Maine Rule 806, pay for work done in Maine is Maine-source income regardless of where it is paid.

New Hampshire sits on the other side. Its Department of Revenue Administration lists the state-level taxes it collects, and none of them is a tax on wages or salaries. The Interest and Dividends Tax, which once reached some residents' investment income, was repealed for taxable periods beginning after December 31, 2024. A New Hampshire resident with a Maine paycheck therefore owes state income tax to one place: Maine.

Rule 806 does carve out one narrow group. Income earned by a nonresident employee of a political subdivision of an adjoining state, working in Maine under an interlocal agreement, is not Maine-source income, provided the work does not displace a Maine resident employee. Private-sector commuters are not covered.

Returns

Which tax returns does a New Hampshire resident working in Maine file?

One state return: Maine Form 1040ME with Schedule NR attached. Maine's instructions tell nonresidents, part-year residents and safe harbor residents to file Form 1040ME and Schedule NR or NRH, and every nonresident must include a copy of the federal return. For tax year 2025, the 1040ME was due April 15, 2026.

You file nothing with New Hampshire for your wages. Before the repeal, residents with interest and dividend income above $2,400, or $4,800 for joint filers, filed an Interest and Dividends Tax return. The Department of Revenue Administration says no 2025 return is required and 2025 forms will not be issued. Returns for 2024 and earlier are still owed if you met the old test, because the repeal is not an amnesty.

Keep your paperwork together. Schedule NR asks you to enclose W-2 forms from other states and temporary duty papers to support any non-Maine income, and the federal return is what Maine uses as its starting point.

The math

How does Maine calculate tax for a nonresident?

Maine works in two steps. First it figures your tax as if you had been a Maine resident all year, using your entire federal adjusted gross income, Maine modifications, the standard or itemized deduction and the personal exemption. Then Schedule NR gives back a nonresident credit for the part of that tax tied to income you earned outside Maine.

The effect is that your Maine wages are taxed at the average rate that applies to your whole income, not the lower rate they would face alone. For 2026, a single filer's Maine tax is:

• 5.8% of taxable income under $27,400
• $1,589 plus 6.75% of the excess over $27,400, up to $64,850
• $4,117 plus 7.15% of the excess over $64,850

The 2026 personal exemption is $5,300, and Maine's revised 2026 schedule shows a $15,700 standard deduction for single filers. From 2026, a 2% surcharge applies to Maine taxable income above $1,000,000 for single filers. If all of your income comes from a Maine job, the nonresident credit is zero and your Maine tax matches a resident's.

Double tax

Is there a double taxation credit between Maine and New Hampshire?

None is needed. Double taxation happens when two states tax the same wages, and New Hampshire does not tax wages at all. Whatever Maine charges is your entire state income tax on that pay.

A home-state credit for tax paid to the work state only exists where the home state taxes its residents' out-of-state wages. New Hampshire has no such tax, so there is nothing to offset. Maine's own credit for income tax paid to other jurisdictions is for Maine residents, and Maine says you generally cannot claim both that credit and the Schedule NR nonresident credit on one return, apart from some part-year situations.

What New Hampshire residency does buy you is freedom from state income tax on income that is not from Maine. Maine says nonresidents generally do not include most pensions, annuities or interest as Maine income, while wages, business income and capital gains from Maine sources stay taxable. Pay for days worked at home in New Hampshire falls outside Maine as well.

Payroll

What should my Maine employer withhold?

Maine income tax, once you pass the threshold. The 2026 Maine withholding instructions tell employers that if a nonresident employee works in Maine for more than twelve days and earns more than $3,000 during the year, they must ordinarily withhold Maine income tax. Nothing is withheld for New Hampshire.

Hand payroll a Maine Form W-4ME along with your federal W-4. Maine allowances on the W-4ME are no longer based on federal W-4 information, so complete it on its own terms instead of copying federal entries.

Know what counts as Maine pay. Rule 806 covers wages, taxable benefits, commissions and payment in kind for work done in Maine, and it treats sick time and vacation time earned while working in Maine as Maine pay. Unemployment compensation tied to a Maine job is Maine-source income for a nonresident. Pay you put into a 401(k) plan is not subject to Maine tax.

Worked example: New Hampshire resident with a hybrid Maine job

Single filer, 2026 Maine figures, $60,000 of wages as the only income, 60% of working days in Maine, no federal adjustments or Maine modifications. Arithmetic only.

Remote work

What if I work from home in New Hampshire part of the week?

Those home days are not Maine days. Maine taxes compensation for personal services performed in Maine, so a hybrid employee splits wages by where the work happened. When the exact Maine pay cannot be pinned down, Rule 806 multiplies gross wages by the days spent working in Maine over total working days. Holidays, sick days, vacations and leave are left out of the total, and a day split between Maine and somewhere else counts as half a Maine day.

Take someone who works three days a week at an office in Kittery and two at home in Portsmouth. On a clean schedule, about 60% of wages would be Maine-source. Keep a calendar or badge log, because the fraction rests on proof of where each day was worked.

Occasional visitors have more room. For the 12-day threshold, any part of a day worked in Maine counts as a full day, and up to 24 days of certain services, such as training and site inspections, do not count toward the 12.

Moving

What happens if I move between Maine and New Hampshire mid-year?

You become a part-year resident and still file Form 1040ME with Schedule NR. What changes is the definition of Maine income. Any income you received as a Maine resident is Maine income, regardless of where it was earned. Income received after you became a New Hampshire resident counts only if it came from Maine sources.

Leaving Maine takes more than a new mailing address. Maine says you stay domiciled in Maine until you give up your Maine domicile and establish one elsewhere. It also treats a person domiciled in another state as a Maine resident if they keep a permanent place of abode in Maine for the entire year and spend more than 183 days there. Evidence Maine weighs includes property ownership, driver's license, vehicle registrations and voter registration.

Married couples

How do married couples with one Maine earner file?

Look at Schedule NRH. If you filed a joint federal return, Maine allows NRH when spouses have different residency statuses, or when both are nonresidents and only one has income from Maine. Filing NRH means you choose to be taxed as a single individual on the Maine return even though the federal return was joint.

This fits a New Hampshire household where one spouse commutes to Maine and the other works in New Hampshire. A joint Maine return starts from the couple's total federal adjusted gross income. Credits on Schedule A are prorated by your share of household income on NRH, so compare both versions before filing.

Withholding errors

What if Maine tax was withheld for days I worked in New Hampshire?

File the 1040ME anyway. Maine's instructions say you must file a return to claim any refund due to you, and Schedule NR is where the non-Maine share of your wages comes back out. List total federal income on line 1a, Maine-source income on line 1b and the rest on line 1c, and keep your day log with your records.

Then fix the cause with payroll so future withholding follows your actual Maine days. If you only visit Maine a handful of days, Maine says a nonresident's Maine pay may not be subject to withholding when days worked in Maine fall below the threshold.

This is general information, not tax advice. For your own figures, use the Maine Revenue Services forms and guidance documents linked below.