Moving from Canada to New Hampshire: No Income Tax, High Property Tax, and the Boston Commute

New Hampshire has never taxed wages, salaries, or business income. Until recently it did tax interest and dividends, a narrow tax that only touched investment income, and that tax finished its phase-out to zero on January 1, 2025. As of this year, New Hampshire has no state income tax of any kind, joining Florida, Texas, Nevada, and a handful of others in the true no-income-tax club. It also has no sales tax and no state estate tax. What it does have is some of the highest property tax rates in the country, since property tax is basically the only lever the state has to fund schools and towns. New Hampshire also sits at the edge of the Boston metro, which means a lot of residents commute across the border into Massachusetts for work, and that commute has its own tax wrinkle. The federal cross-border obligations (departure tax, RRSP, FBAR) are the same as any Canada-to-US move. This page covers what’s different about New Hampshire.

How does New Hampshire compare to Canadian provinces?

New Hampshire’s income tax rate is zero across the board, which puts it well below any Canadian province at every income level, not just at the top.

Jurisdiction	Top rate	Notes
Ontario	~20.5% (with surtax)	On income above $220,000
Quebec	25.75%	On income above $126,000
New Hampshire	0%	No state return filed

On $150,000 of employment income, a move from Ottawa or Montreal to New Hampshire eliminates the provincial tax layer entirely. What replaces it isn’t a lower-rate income tax the way Massachusetts or Illinois would, it’s a shift to property tax and, for business owners, a couple of narrow business-level taxes covered below.

What happened to the Interest & Dividends Tax?

New Hampshire used to charge a 5% Interest and Dividends (I&D) Tax on income from interest and dividends, the only piece of individual income the state taxed at all. Lawmakers phased it out over three years: 4% in 2023, 3% in 2024, and 0% starting January 1, 2025. For tax year 2025 forward, the tax no longer exists.

This matters for the RRSP question that comes up in every other state guide on this site: does the state tax RRSP or RRIF withdrawals, and does closing the TFSA before departure matter at the state level? In New Hampshire, both questions are moot. There’s no state income tax return at all now, so there’s nothing for the withdrawal, the CPP/OAS, or the TFSA income to land on. The federal treatment (Article XVIII deferral, Part XIII withholding on the Canadian side, ordinary income treatment on the US 1040) is the entire tax story once you’re in New Hampshire.

What about working in Massachusetts?

New Hampshire’s outer ring runs into the Boston metro, and a meaningful share of Nashua, Manchester, and Seacoast residents work for Massachusetts employers, some fully remote, some commuting into Boston or Cambridge a few days a week. This is where New Hampshire’s zero income tax runs into a real limit.

Massachusetts taxes nonresidents on Massachusetts-source income, which for an employee means wages earned for work physically performed in Massachusetts. A New Hampshire resident who commutes into a Boston office five days a week owes Massachusetts nonresident tax on close to all of their wages from that job, at Massachusetts’s flat 5% rate. A hybrid arrangement only pulls in the days actually worked in Massachusetts; days worked from a home office in New Hampshire generally aren’t Massachusetts-source. New Hampshire challenged Massachusetts’s authority to tax remote-working NH residents during the pandemic-era sourcing rule, and lost when the US Supreme Court declined to hear the case in 2021.

The part that catches people off guard: in most cross-border commuting situations, your home state taxes your full income but gives you a credit for tax paid to the state where you worked, so you don’t pay twice. New Hampshire has no income tax, so there’s no credit to give. You simply pay the full Massachusetts nonresident tax on the Massachusetts-source portion, with no offset. New Hampshire’s tax advantage is real for income earned from New Hampshire, but it doesn’t erase the Massachusetts bill on income earned there.

What happens on the Canadian side when I leave?

The standard departure sequence:

• Deemed disposition at fair market value of worldwide assets
• Final Canadian return from January 1 to the departure date
• Provincial tax at the rates of your province of residence on departure day
• T1161 and T1243 if applicable
• CRA non-resident notification
• RRSP left open, TFSA closed

What about property taxes and business taxes?

Property tax is where New Hampshire recovers what it doesn’t collect through income or sales tax. Effective rates typically run 1.5% to 2.5% of market value, among the highest in the country, because towns fund schools almost entirely through the local property tax base. A $600,000 home at a 2% effective rate runs $12,000 a year, a bill that would be a rounding error in a low-property-tax, higher-income-tax state. There’s no general sales tax either, so the only broad consumption tax is the 8.5% meals and rooms tax on restaurant meals and hotel stays.

For business owners, New Hampshire applies two taxes that don’t touch W-2 employees:

• Business Profits Tax (BPT): 7.5% on business income over $92,000
• Business Enterprise Tax (BET): 0.55% on the value of compensation, interest, and dividends paid

A Canadian corporation with US nexus in New Hampshire, or a US LLC run out of a New Hampshire home office, needs to account for both. Neither applies to salary income; they’re entity-level taxes on the business itself.

How does New Hampshire compare to neighboring states?

New Hampshire’s zero income tax stands out against Massachusetts’s flat 5% (9% above roughly $1.08 million with the surtax), Maine’s graduated rates up to about 7.15%, and Vermont’s rates up to about 8.75%. It’s the reason New Hampshire towns along the Massachusetts border have absorbed so much of the “work in Boston, live tax-free” commuter population over the decades, even with the Massachusetts wage-sourcing rule limiting the upside for anyone actually working in a Massachusetts office. Against Connecticut, which combines a graduated income tax with high property taxes of its own, New Hampshire keeps the property tax problem but drops the income tax entirely.

What should I do next?

The Canadian exit follows the standard departure checklist. On the New Hampshire side, the main planning items are confirming how much of your income (if any) is Massachusetts-source if you work across the border, budgeting for property tax as your real state and local tax cost, and, if you’re running a business, checking whether the BPT or BET thresholds apply.

• Departure tax checklist, the full Canadian exit sequence
• US-Canada tax treaty explained, the framework behind RRSP deferral and credits
• RRSP and TFSA on a US move, federal treatment and reporting
• First US tax return after moving from Canada, the arrival-year mechanics
• State income tax for cross-border filers, how New Hampshire compares
• Moving from Canada to Massachusetts, for the Boston side of the commute
• Moving from Canada to Connecticut, another high-property-tax Northeast option
• Moving from Ontario to Florida, a no-income-tax comparison without the property tax tradeoff
• Moving from BC to California, the opposite end of the spectrum
• Canada departure tax (T1161/T1243), the exit filing detail
• Moving from Canada to Maine, the neighboring border state with graduated rates up to 7.15%
• Moving from Canada to Vermont, the Quebec-border neighbor with rates up to 8.75%

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.