This has been a confusing area of NH tax law for 10 or 20 yrs. I look forward to the I&D tax going away in 2027.
NH seems to tax actual distributions from LLCs/partnerships/s-corps (cash or property). It is unrelated to any number on a K-1. It is not a profits tax (the is a separate NH tax that only applies if gross income > $103k). Below are the details from the NH DP-10 instructions, but I find this confusing and would welcome thoughts of anyone who has carefully read the statues or regulations.
https://www.gencourt.state.nh.us/rsa/html/NHTOC/NHTOC-V-77.htm
https://www.gencourt.state.nh.us/rules/state_agencies/rev900.html
The DP-10 instructions ( https://www.revenue.nh.gov/forms/2023/documents/dp-10-instructions-2022.pdf ) page 3 says (emphasis added):
LINE 2 DISTRIBUTIONS SUBJECT TO THE NEW HAMPSHIRE INTEREST AND DIVIDENDS TAX
In Column I, enter the entity code number that represents the entity type of the payor. See the box below for ENTITY TYPE CODES. In Column II, enter the name of the
payor. In Column III, enter payor's SSN or FEIN, if known. In Column IV, enter the total amount of cash or property distribution received or constructively received. This
amount may not correspond to any line on your Federal Form 1040 or Federal Schedule K-1. NOTE: This is not a tax on pass-through portfolio income, gains or losses from a Federal Schedule K-1. Therefore, do not include any pass-through income, gains or losses from Federal Schedule K-1. Enter any taxable annuities or the actual cash or property distributions you received or constructively received from any of the taxable income classes described in RSA 77:4. These distributions are subject to tax in New Hampshire as a "dividend". Taxable annuities are those annuities not invested in a tax-deferred investment plan pursuant to RSA 77:4-b.
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