Work in New Hampshire, Live in Massachusetts: How Taxes Work

State Income Tax

Does New Hampshire tax your wages?

No. New Hampshire does not tax wages or salaries. Its only personal income tax, a 3% tax on the interest and dividends received by New Hampshire residents, was repealed effective January 1, 2025, under House Bill 2, signed by Governor Chris Sununu during the 2023 legislative session. New Hampshire still collects business taxes such as the Business Profits Tax and the Business Enterprise Tax, but it has no tax on your paycheck and no longer taxes interest and dividends.

For a Massachusetts resident who commutes to a job in New Hampshire, this makes the filing side simple. Your W-2 will show no New Hampshire income tax withheld, and there is no New Hampshire return to prepare. Your entire state income tax obligation runs through Massachusetts. That sets this commute apart from pairings where both states tax the same wages and a credit is needed to prevent double taxation.

Filing Requirements

Which tax return do you file?

File only Massachusetts Form 1, the resident income tax return. Massachusetts taxes its residents on income from all sources, inside or outside the state, and you must file if your gross income was more than $8,000. Working in New Hampshire does not reduce or defer your Massachusetts tax. You report your full wages on Form 1 and pay the 5% Massachusetts rate on your taxable income.

Because you paid no income tax to another state on your wages, there is no other-state credit to claim. Compare this to the reverse direction, where an NH resident working in MA must file Form 1-NR/PY as a Massachusetts nonresident and pay MA tax on wages earned inside the state.

Payroll and Withholding

How does withholding work with a New Hampshire employer?

Whether your employer must withhold Massachusetts tax depends on its ties to Massachusetts. The Massachusetts Department of Revenue says an employer does not have to withhold if its only connection to Massachusetts is employing a Massachusetts resident outside Massachusetts. It may still withhold for your convenience if you and the employer both agree.

An NH employer that does business or keeps an office in Massachusetts is in a different position. It must withhold the amount determined for Massachusetts purposes, minus any amount withheld for its own state. New Hampshire has no state withholding, so there is nothing to subtract: the employer withholds and pays the full Massachusetts amount. Whether you work on the road, at home or in the employer's office does not change that duty.

If your employer withholds Massachusetts tax, give it a completed Form M-4 (Massachusetts Employee's Withholding Exemption Certificate). The form has a line for additional withholding per pay period under an agreement with your employer. The Circular M withholding tables, published by the Massachusetts Department of Revenue, use a 5.0% rate effective January 1, 2026.

If no Massachusetts tax is withheld, you are responsible for paying it directly. Two approaches work:

• Quarterly estimated payments using Form 1-ES (detailed in the next section).
• Extra withholding on another job. If you also work for an employer that withholds Massachusetts tax, you can ask it to withhold an additional amount to cover your NH wages.

Massachusetts expects income tax to be paid during the year. Waiting until you file your annual return and paying everything at once can trigger an underpayment penalty.

Estimated Payments

How do you avoid a Massachusetts estimated tax penalty?

Generally, if you expect to owe more than $400 of Massachusetts tax on income not subject to withholding, you must make estimated tax payments. The due dates for tax year 2026 are:

• April 15, 2026
• June 15, 2026
• September 15, 2026
• January 15, 2027

Submit each payment with a Form 1-ES voucher, or pay electronically on MassTaxConnect. Divide your expected annual tax into four roughly equal installments, using the worksheet that comes with Form 1-ES. If your income will be above the surtax threshold, include the surtax in your estimate: all taxpayers subject to the 4% surtax must file their returns and make all payments electronically.

No underpayment penalty applies if the tax you owe after credits and withholding is $400 or less. Above that, Form M-2210 compares your payments with the smaller of 80% of the current year's tax (66.67% for qualified farmers and fishermen) or the prior year's tax after credits. Use Form M-2210 with your annual return to figure any penalty or to show that an exception applies.

Remote Work

What if you work remotely from Massachusetts for a NH employer?

Your state tax result is the same. Massachusetts taxes its residents on all income regardless of where the work is performed. Whether you commute to an office in Nashua or work from your home in Lowell, your full salary is subject to Massachusetts income tax at 5%.

Working from home in Massachusetts does change your employer's side. You are then no longer employed outside Massachusetts, so the exception for an employer whose only connection is a Massachusetts resident working elsewhere no longer fits, and the employer will generally need to withhold Massachusetts tax. The Department of Revenue says it makes no difference whether the employee works on the road, at home or in the employer's office.

Paid Family and Medical Leave follows the work location too. Under 458 CMR 2.01, service is deemed localized within Massachusetts if it is performed entirely within Massachusetts. A job done entirely in New Hampshire is generally outside Massachusetts PFML, while a job done entirely from a Massachusetts home office generally falls inside it. Ask your employer which applies to you.

The reverse commute works differently. Massachusetts allocates a nonresident's wages by the share of working time spent in Massachusetts, so an NH resident who works some days from home in New Hampshire for a Massachusetts employer is generally not taxed by Massachusetts on those days. As a Massachusetts resident, you owe MA tax on all income wherever you work.

For more on multi-state remote work situations, see our remote work two-state tax guide.

Example: MA resident earning $85,000 in NH

Single filer, all work performed in New Hampshire, FICA deduction and personal exemption from the Form 1 instructions, tax year 2026 (approximate).

Local Taxes

Are there local income taxes in this commute?

No. New Hampshire's local taxes are property, excavation and timber taxes, not income taxes, and Massachusetts cities and towns do not levy a local income tax. There are no city, county or school district income taxes in either state to add a layer to your bill.

This makes the NH-MA crossing simpler than many other border pairings. Commuters who cross into Pennsylvania face a local earned income tax at their work location, and New York City residents owe a separate city income tax. None of that applies here.

Your only income tax is the Massachusetts 5% rate on taxable income. If your taxable income exceeds $1,107,750 in 2026, an additional 4% surtax applies to the portion above that threshold, so that slice is taxed at 9%. Below the threshold, the 5% rate is your entire state tax. The threshold is adjusted for inflation each year.

Deductions and Exemptions

What Massachusetts deductions reduce your tax?

Massachusetts does not offer a standard deduction in the way the federal return does. Instead, Form 1 gives a personal exemption that reduces your taxable income before the 5% rate is applied:

• Single: $4,400
• Head of household: $6,800
• Married filing jointly: $8,800
• Each dependent: $1,000

These amounts are the same whether your wages come from a Massachusetts employer or a New Hampshire employer. After subtracting the exemption and any allowable deductions, the remainder is taxed at 5%.

Massachusetts also lets you deduct up to $2,000 of contributions to Social Security and Medicare (FICA) or to U.S. or Massachusetts retirement systems, on Form 1 line 11. A wage earner with $85,000 of pay has more than $6,000 of FICA withheld, so the full $2,000 applies. Massachusetts allowable deductions differ from the itemized deductions on the federal Schedule A; check the Form 1 instructions for the full list.

This is general information, not tax advice.

Mid-Year Moves

What if you moved between NH and MA during the year?

If you changed your primary residence from Massachusetts to New Hampshire (or the other way) during the tax year, file Massachusetts Form 1-NR/PY as a part-year resident instead of Form 1. The same form covers part-year residents and nonresidents.

As a part-year resident, Massachusetts taxes all income you received while you lived in the state, plus any Massachusetts-source income from the part of the year you were not a resident. Since New Hampshire does not tax wages, there is no NH return for either part of the year.

Form 1-NR/PY asks for the dates you were a Massachusetts resident, so keep records of your move. Your exemptions are prorated by the ratio of days you were a resident. For people moving from MA to NH, the move usually ends state income tax on future wages, as long as the work is not done in Massachusetts.