New Hampshire Estate Tax and Inheritance Tax: What You Actually Owe
New Hampshire Estate Tax and Inheritance Tax: What You Actually Owe
New Hampshire does not have an estate tax. It also does not have an inheritance tax. Both were repealed years ago, and the state has since eliminated its Interest and Dividends Tax as well — making it one of the most favorable tax jurisdictions in the country for settling an estate.
That said, there are still tax obligations that affect some estates, and understanding exactly what applies to your situation saves you from either overpaying out of confusion or missing a legitimate filing deadline.
No Estate Tax in New Hampshire
The New Hampshire Estate Tax (RSA 87) was rendered inactive for deaths occurring on or after January 1, 2005. The mechanism behind this repeal was the federal elimination of the state death tax credit, which had been the basis for New Hampshire's estate tax calculation. Once the federal credit was gone, New Hampshire's estate tax had nothing to compute against, effectively making it a zero-dollar tax. The state then formally decoupled from the federal estate tax structure.
For an estate administrator, this means there is no state estate tax return to file. You do not need to contact the New Hampshire Department of Revenue Administration about estate tax unless you are dealing with a death that occurred before 2005 — an increasingly rare scenario.
No Inheritance Tax in New Hampshire
New Hampshire previously imposed a Legacy and Succession Tax (RSA 86) — a tax that applied to property transferring to certain classes of beneficiaries after death. It reached as high as 18% on the fair market value of property passing to non-lineal descendants, friends, and distant relatives.
That tax was permanently repealed for deaths occurring on or after January 1, 2003. Lineal descendants (children, grandchildren, parents) had long been exempt; the 2003 repeal extended the elimination to all beneficiaries.
There is no inheritance tax in New Hampshire regardless of your relationship to the deceased. A nephew, a friend, a neighbor named in the will — none of them owe New Hampshire any tax on what they receive.
No Interest and Dividends Tax (As of January 1, 2025)
For most of New Hampshire's history, the state imposed an Interest and Dividends Tax (I&D Tax) on unearned income: interest from bonds and promissory notes, dividends from corporate stock, and certain LLC distributions. The historical rate was 5%.
The legislature phased this tax out over several years:
- 2023: Rate reduced to 4%
- 2024: Rate reduced to 3%
- January 1, 2025: Tax fully and permanently repealed
For estates where the decedent died in 2025 or later, you do not need to file any New Hampshire income tax return. The state has no personal income tax and no I&D tax on deaths occurring after December 31, 2024.
If the decedent died in 2024: You are still obligated to file the final 2024 Interest and Dividends Tax Return (Form DP-10) by April 15, 2025, if the decedent's unearned income exceeded the personal exemption of $2,400 (or $4,800 for joint filers). The 3% rate applies to amounts above the exemption. This obligation is not eliminated by the 2025 repeal — the repeal is not retroactive. The estate remains subject to a standard three-year audit period for 2024 returns.
If you are settling a 2024 or earlier estate and are unsure whether a DP-10 return needs to be filed, check with a CPA. It is a relatively simple filing when applicable, but the penalty for missing it is not worth the risk.
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What About Federal Estate Tax?
Federal estate tax is separate from New Hampshire state taxes. The federal estate tax exemption is extremely high — over $13 million per individual for 2025 and 2026 (the exact amount adjusts annually for inflation). The vast majority of estates do not approach this threshold.
If the gross estate — including life insurance, retirement accounts, real estate, and all other assets — comes anywhere near the federal exemption threshold, consult an estate planning attorney or CPA before distributing assets. Federal estate tax returns (Form 706) are due nine months after the date of death with a six-month extension available.
For the typical New Hampshire estate worth $200,000 to $1,000,000, federal estate tax is unlikely to apply, and state estate and inheritance taxes simply do not exist.
What Taxes Do Apply to a New Hampshire Estate?
With the state's major death taxes eliminated, what does the executor actually deal with on the tax front?
Final federal income tax return (Form 1040): The executor must file the decedent's final personal income tax return for the year of death. Income earned through the date of death is reported on this return as normal. New Hampshire residents do not file a state income tax return because New Hampshire has no income tax on wages or salaries.
Estate income tax (Form 1041): If the estate earns income after the date of death — from rental property, investment accounts, or a business still operating — the estate must file a federal income tax return (Form 1041) for each year the estate remains open and generates more than $600 in income. This is separate from the decedent's personal return.
Real Estate Transfer Tax: When estate real estate is sold to a third party (not transferred to an heir), the New Hampshire Real Estate Transfer Tax applies at $15 per $1,000 of consideration (or $0.75 per $100). However, transfers that occur by devise (under a will), intestate succession, or by the death of a joint tenant are exempt from this tax. If you are transferring the family home to the children named in the will, you owe no transfer tax — only the standard recording fee of $10 for the first page and $4 per subsequent page at the County Registry of Deeds, plus a $25 LCHIP surcharge.
Property taxes: Real estate in New Hampshire continues to accrue property taxes after death. These are the estate's obligation until the property is transferred. Make sure to include outstanding property tax bills in your inventory of estate liabilities.
For a complete walkthrough of the New Hampshire estate settlement process — from filing the probate petition through final asset distribution — see our guide at /us/new-hampshire/estate-settlement/.
Summary: NH Tax Obligations by Scenario
| Situation | NH Tax Obligation |
|---|---|
| Death in 2025 or later | No NH estate tax, no NH inheritance tax, no NH I&D tax return |
| Death in 2024 | No estate or inheritance tax; DP-10 return may be required by April 15, 2025 if I&D income exceeded $2,400 |
| Death in 2003–2023 | Check whether I&D returns were filed for applicable years; audit window closes after 3 years |
| Death before 2003 | Legacy and Succession Tax may have applied — seek professional guidance |
| Death before 2005 | NH Estate Tax may have applied — seek professional guidance |
| Real estate transfer to heirs | Exempt from Real Estate Transfer Tax; standard recording fees apply |
| Real estate sold to third party | Transfer tax at $15/$1,000 of consideration |
New Hampshire's tax-friendly posture for estates is genuine and well-established. The legislature has been systematically removing death-related taxes for over two decades. For most families settling a New Hampshire estate today, the tax burden is federal-only — and even that applies only to the largest estates.
Where New Hampshire does impose significant obligations is through the Medicaid Estate Recovery Program (MERP), which is not a tax but can function like one if the decedent received state-funded medical care. If the DHHS Estate Recovery Unit has been in contact with you, that situation requires separate attention before any assets are distributed — see New Hampshire Medicaid estate recovery for details on how those claims work.
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