Military Retirement in New Hampshire
Complete 2026 Tax Guide for Veterans
NO STATE INCOME TAX
Live Free or Die - One of only 9 no-income-tax states!
Quick Facts: New Hampshire for Military Retirees
New Hampshire Tax Overview
New Hampshire is one of only 9 states with NO state income tax. As of January 1, 2025, New Hampshire fully repealed its Interest & Dividends Tax, making it a true zero-income-tax state. Your military retirement, civilian wages, Social Security, TSP distributions, and all other income are completely state tax-free.
2025 Update: New Hampshire eliminated its 5% tax on interest and dividend income effective January 1, 2025. Previously, while wages and pensions weren't taxed, investment income was. Now ALL income is tax-free at the state level.
| Income Type | Tax Treatment | Notes |
|---|---|---|
| Military Retirement Pay | Tax-Free | No state income tax |
| VA Disability Compensation | Tax-Free | Also federally tax-free |
| Social Security | Tax-Free | No state income tax |
| TSP / 401(k) Distributions | Tax-Free | No state income tax |
| Civilian Employment | Tax-Free | No state income tax |
| Interest & Dividends | Tax-Free (as of 2025) | Previously taxed at 5% |
| Sales Tax | NONE | No state sales tax |
Military Presence in New Hampshire
While New Hampshire doesn't have major active-duty installations within its borders, it has National Guard presence and is close to significant military facilities in neighboring states.
Pease Air National Guard Base
Portsmouth
- • 157th Air Refueling Wing
- • KC-46A Pegasus tankers
- • Former Pease AFB (closed 1991)
- • Guard/Reserve opportunities
- • Pease Development Authority business park
Portsmouth Naval Shipyard
Kittery, ME (NH border)
- • Located on NH/Maine border
- • Submarine maintenance & overhaul
- • 6,000+ civilian employees
- • Major employer for NH residents
- • Excellent civilian career opportunities
NH National Guard
Facilities statewide
- • Headquarters in Concord
- • Army & Air National Guard
- • Armories in multiple cities
- • Reserve component opportunities
Nearby Boston-Area Bases
Within 1-hour commute
- • Hanscom AFB (Bedford, MA)
- • Coast Guard Base Boston
- • US Army Soldier Systems Center (Natick)
- • Defense contractor opportunities
Cost of Living in New Hampshire
New Hampshire has a higher cost of living than average, primarily due to housing costs. However, the lack of income tax and sales tax provides significant savings that can offset these costs, especially for retirees with substantial pension income.
| Category | New Hampshire | National Average |
|---|---|---|
| Overall Cost of Living | 110 (10% above) | 100 |
| Median Home Price | $475,000 | $420,000 |
| Property Tax Rate | 2.05% (highest in US) | 1.07% |
| State Income Tax | 0% | ~5% average |
| State Sales Tax | 0% | ~6% average |
Tax Trade-Off: New Hampshire relies heavily on property taxes instead of income/sales taxes. For military retirees with high pension income, the income tax savings often outweigh higher property taxes. Calculate your specific situation with our calculator.
Best New Hampshire Cities for Military Retirees
Portsmouth / Seacoast
Near Portsmouth Naval Shipyard, Pease ANG
- • Historic coastal city
- • Strong military/defense community
- • Excellent restaurants, culture
- • Close to beaches
- • Higher housing costs
Manchester / Nashua
Southern NH, Boston commuter area
- • Largest cities in NH
- • Strong job market (tech, healthcare)
- • VA Medical Center in Manchester
- • Easy access to Boston
- • More affordable than seacoast
Concord
State Capital, National Guard HQ
- • State capital - government jobs
- • NH National Guard headquarters
- • More affordable housing
- • Central location
- • Small-city feel
Lakes Region
Laconia, Meredith, Wolfeboro
- • Lake Winnipesaukee recreation
- • Popular retirement destination
- • Four-season outdoor activities
- • Quieter, scenic living
- • Further from military facilities
VA Healthcare in New Hampshire
VA Medical Center
- Manchester VA Medical Center - Full-service hospital, NH's only VA Medical Center
Community-Based Outpatient Clinics
- • Conway
- • Littleton
- • Portsmouth
- • Somersworth
- • Tilton
Note: Veterans in southern NH also have access to VA Boston Healthcare System facilities in Massachusetts, and the White River Junction VA in Vermont serves the western part of the state.
Pros & Cons of Retiring in New Hampshire
✅ Pros
- ✓ NO state income tax on ANY income
- ✓ NO state sales tax
- ✓ All retirement income tax-free
- ✓ Beautiful New England scenery
- ✓ Four-season recreation (skiing, lakes)
- ✓ Close to Boston metro opportunities
- ✓ Portsmouth Naval Shipyard jobs
- ✓ Low crime rates, excellent schools
- ✓ "Live Free or Die" libertarian culture
❌ Cons
- ✗ Highest property taxes in US (2.05%)
- ✗ High housing costs
- ✗ No major active-duty installations
- ✗ Cold, snowy winters
- ✗ Limited military community
- ✗ Only one VA Medical Center
- ✗ Higher overall cost of living
Frequently Asked Questions
Does New Hampshire have any state income tax?
No. As of January 1, 2025, New Hampshire has NO state income tax on any income type. Previously, there was a 5% tax on interest and dividends, but that has been fully repealed.
Is New Hampshire good for military retirees despite high property taxes?
It depends on your situation. If you have a high military pension ($50,000+), the income tax savings typically outweigh property tax costs. Use our calculator to compare your specific scenario with other states.
What veteran property tax exemptions does New Hampshire offer?
New Hampshire offers property tax credits for veterans, with amounts varying by town. Disabled veterans and surviving spouses may qualify for additional exemptions. Contact your local town assessor for specific amounts.
Can I work at Portsmouth Naval Shipyard and live in New Hampshire?
Yes! Many Portsmouth Naval Shipyard employees live in New Hampshire. You'd pay no state income tax on your wages, making NH an attractive option for Shipyard workers despite Maine being the shipyard's official location.
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