Live in New Hampshire, Work in Indiana: Which State Taxes Your Paycheck?
Answer
The work state takes it. Indiana taxes nonresidents on income earned within the state and expects a nonresident return; New Hampshire has no wage income tax, so nothing is due there. This is the common pattern for people who live in a no-tax state and commute across the line.
Last verified
This is the mirror image of the more common commute. There is no home-state return to file, so the Indiana nonresident return carries the whole obligation — and because New Hampshire charges nothing, there is no credit mechanism involved anywhere.
Indiana also has a layer below the state one, and it is the layer that survives every agreement: Every Indiana county levies its own income tax, and the reciprocal agreements do not cover it. A resident of a reciprocal state who works in Indiana still pays Indiana county tax on those wages.
What you file
- 1Nonresident return · IndianaForm IT-40PNR
File a Indiana nonresident return for the wages you earned in Indiana. New Hampshire has no wage income tax, so there is no second return and no credit to claim.
The two states, side by side
| New Hampshire | Indiana | |
|---|---|---|
| Taxes wages | No | Yes — flat |
| Reciprocity partners | None | 5 (Form WH-47) |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form IT-40PNR |
| Credit for other-state tax | No income tax | Schedule 6 (Form IT-40PNR) |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | Yes |
| Revenue department | New Hampshire Department of Revenue Administration | Indiana Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Indiana and working in New Hampshire gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- Remote worker: New Hampshire → IndianaNo state income tax on your wages
- 1099 contractor: New Hampshire → IndianaClient state only, if you work there
- Moved mid-year: New Hampshire → IndianaOne part-year return — the state you moved to
Other New Hampshire pairs
Questions people actually ask
I live in New Hampshire and work in Indiana. Which state takes the tax out of my paycheck?
The work state takes it. Indiana taxes nonresidents on income earned within the state and expects a nonresident return; New Hampshire has no wage income tax, so nothing is due there. This is the common pattern for people who live in a no-tax state and commute across the line.
Which state should my employer be withholding for?
Indiana. The wages are sourced to Indiana, so Indiana withholding is correct and there is no New Hampshire withholding to set up, because New Hampshire levies no income tax on wages.
How current is this?
The New Hampshire and Indiana rules on this page were last checked against New Hampshire Department of Revenue Administration and Indiana Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- New Hampshire Department of Revenue Administration — individual income taxaccessed 2026-08-07
- Indiana Department of Revenue — individual income taxaccessed 2026-08-07