The Short Answer
New Hampshire has no tax on earned income, and the interest-and-dividends tax was fully repealed after 2024, so active-duty pay is not taxed. Your base pay is set by the federal pay table — identical to every other state for your rank and years of service. What actually changes in New Hampshire is your BAH (averaging $1,800/mo without dependents and $2,200/mo with dependents) and how New Hampshire treats the taxable portion of your pay.
State tax status: ✓ TAX EXEMPT
2026 Worked Example — E-5, 6 Years, With Dependents in New Hampshire
Here is how the math actually lands for a mid-career enlisted member stationed in New Hampshire, built the way I read my own LES. Base pay and BAS are federal; the New Hampshire BAH figure is the state average.
| Monthly line item | Amount | Taxable? |
|---|---|---|
| Base pay (E-5, over 6 yrs) | $3,874 | Yes (federal + state) |
| BAH with dependents (New Hampshire avg) | $2,200 | No — tax-free |
| BAS (enlisted) | $476.95 | No — tax-free |
| Gross monthly entitlements | $6,550.95 | — |
| Taxable income (base pay only) | $3,874 | — |
| Est. New Hampshire state income tax | $0 (no state income tax) | — |
Only the $3,874 of base pay is taxable — the $2,676.95 of BAH + BAS is completely tax-free. Run your exact rank, ZIP, and dependency status in the Military Pay Calculator for a precise estimate.
How New Hampshire Taxes Each Type of Military Pay
Active-Duty Base Pay
New Hampshire has no tax on earned income, and the interest-and-dividends tax was fully repealed after 2024, so active-duty pay is not taxed.
Guard & Reserve Drill Pay
No tax on earned income; Guard and Reserve drill pay is untaxed.
Military Retirement Pay
No tax on earned income or (after 2024) investment income; military retirement pay is not taxed.
VA Disability Compensation
VA disability compensation is tax-free federally and New Hampshire does not tax it.
SCRA & Residency in New Hampshire
With no earned-income tax, New Hampshire is an attractive SCRA legal residence for servicemembers.
This is the single most misunderstood rule in military pay. Your home of record / state of legal residence — not your duty station — generally determines who can tax your military pay. Changing it is a deliberate act, not something that happens automatically when you PCS.
Major Military Installations in New Hampshire
- Portsmouth Naval Shipyard (Kittery, ME / NH border)
- Pease Air National Guard Base
- New Boston Space Force Station
BAH is set by the Military Housing Area covering your duty ZIP. Verify your exact rate at the official DoD BAH lookup.
Official Sources
FAQ — Military Pay in New Hampshire
Does New Hampshire tax my military base pay?
New Hampshire has no tax on earned income, and the interest-and-dividends tax was fully repealed after 2024, so active-duty pay is not taxed.
Is my BAH taxed in New Hampshire?
No. BAH is federally tax-free and is never counted as income for New Hampshire state income tax, regardless of how New Hampshire treats base pay.
Does New Hampshire tax military retirement pay?
No tax on earned income or (after 2024) investment income; military retirement pay is not taxed.
I'm stationed in New Hampshire but my home of record is elsewhere — who taxes me?
With no earned-income tax, New Hampshire is an attractive SCRA legal residence for servicemembers.