How Your Corporation Will Be Taxed
In this guide, you'll learn about the main New Hampshire taxes that apply to corporations, including sales, self-employment, corporate and federal taxes.
How your corporation is taxed will depend on whether it's a New Hampshire S Corporation or C Corporation.
New Hampshire Taxes for Corporations
There are three types of NH state tax you must pay to the NH Department of Revenue: interest and dividends, enterprise, and profits.
Important: All of these taxes apply whether you have a C Corp or an S Corp.
New Hampshire Interest and Dividend Tax
Instead of levying an income tax, New Hampshire levies a 5 percent interest and dividend tax on resident individuals, partnerships, and fiduciaries earning interest and dividend taxable income of more than $2,400 annually.
Important: Recent legislation will phase out the Interest and Dividends (I&D) Tax starting at 4 percent for taxable periods ending on or after December 31, 2023, 3 percent for taxable periods ending on or after December 31, 2024, 2 percent for taxable periods ending on or after December 31, 2025, and 1 percent for taxable periods ending on or after December 31, 2026.
New Hampshire Sales and Use Tax
New Hampshire is one of the few states that does not levy a tax on the sale of goods.
Federal Taxes for Corporations
Federal taxes can be complicated, so speak to your accountant or professional tax preparer to ensure that your New Hampshire corporation is paying the correct amount, and that you're paying the correct individual amount.
Federal Taxes for C Corps
All shareholders who earn wages or a salary from a C Corporation must pay self-employment tax. This tax is administered by the Federal Insurance Contributions Act (FICA) and covers Social Security, Medicare and other benefits. The current self-employment tax rate is 15.3 percent.
You’ll be able to deduct some of your business expenses from your income when calculating how much self-employment tax you owe.
Federal Taxes for S Corps
The Internal Revenue Service allows a corporation to be treated as an S Corporation for tax purposes, provided your business meets certain requirements. This can help you reduce the amount of self-employment tax you pay by allowing you to declare some of your income as salary and other income as distributions or withdrawals.
You do this by filing Form 2553, also known as an S Corp Election form, with the IRS. Bizee can also file the form for you. Use our S Corp Tax Calculator to get an idea of how much money you could save with this election.
Consult with your accountant or tax advisor for more information on reducing your self-employment tax through an S Corporation tax election.
Employee and Employer Taxes
If you pay employees, there are some slightly different tax implications. Speak to your accountant to get clear guidance for your unique situation.
Other Taxes and Duties
Depending on your industry, you may be liable for certain other taxes and duties. For example, if you sell gasoline, you may need to pay a tax on any fuel you sell. Likewise, if you import or export goods, you may need to pay certain duties.
Speak to your accountant about any other taxes or duties you may need to withhold or pay.