NH Contemplates New Estate Tax
Estate plans may become more complicated in the near future as New Hampshire, like many other states, contemplates changes to its tax laws that will bring back a state-level estate tax. The New Hampshire estate tax has effectively been nullified for the past 7 years because it equaled the maximum federal credit for state death taxes. This credit was repealed by Congress in 2001.
The New Hampshire legislature is currently considering a new estate tax provision that would decouple the state’s death tax from the federal estate tax system. Preliminary proposals call for an 8% tax on estates exceeding $2.0 million – a much smaller exemption amount than the $3.5 million currently allowed under the federal law. If NH enacts this lower state exemption, estate plans will need to be revisited to ensure that they have been optimized to reduce both state and federal death taxes.
