PROPRIETORSHIP BUSINESS 
                           New Hampshire                                        2023
                                                                                                                  PROFITS TAX RETURN
                               Department of  
                           Revenue Administration                         NH-1040                                 GENERAL INSTRUCTIONS

WHO MUST FILE 
All business organizations, including single member Limited Liability Companies (SMLLC), taxed as a proprietorship federally must file a NH-1040 Business  Profits Tax 
(BPT) return provided they have conducted business activity in New Hampshire and their gross business income from everywhere is in excess of  
$103,000 (for taxable periods beginning January 1, 2023) For. the definition of a business organization, refer to RSA 77-A:1. 
"Gross business income" means all income for federal income tax purposes from whatever source derived in the conduct of business activity, including but not  limited 
to gross proceeds from sales, compensation for rendering services, gross proceeds realized from trading in stocks, bonds, or other evidences of  indebtedness, gross 
proceeds realized from sale of assets used in trade or business, interest, discount, gross rents, royalties, fees, commissions, dividends,  without any deduction on 
account of the cost of property sold, the cost of materials used, labor costs, interest, discount, delivery costs, taxes, or any other  expense paid or accrued and without 
any deduction on account of losses. 
Grantor Trusts: Income from Grantor Trusts (Section 671 of the IRC) shall be included in the BPT return of the owner(s).

CONFIDENTIAL INFORMATION
Tax information disclosed to the New Hampshire Department of Revenue Administration is held in strict confidence by law. The information may be disclosed to the  
United States Internal Revenue Service, agencies responsible for the administration of taxes in other states in accordance with compacts for the exchange of 
information,  and as otherwise authorized by RSA 21-J:14. 

TAXPAYER IDENTIFICATION
The Commissioner of the Department of Revenue is authorized pursuant to RSA 21-J:27-a to require submission of an SSN, FEIN, or any other identifying number used 
in filing or preparing federal tax documents. If you do not have any such identifying number, or share one with another taxpayer, then, under N.H. Code of Admin. 
Rules, Rev 2903.01, you must obtain a Department Identification Number (DIN). If you have a DIN, use it on all New Hampshire filings. To ensure that your filings and 
payments are applied to the correct account, the sequence of names and taxpayer ID numbers on all filings must be consistent. The failure to provide a taxpayer 
identification number may result in the rejection of filed documents. Failure to timely file documents complete with a consistent taxpayer identification number may 
result in the imposition of penalties and interest, the disallowance of claimed exemptions, exclusions, credits, deductions, or an adjustment that may result in 
increased tax liability.  

NEED FORMS?
To obtain additional forms, you may visit our website at www.revenue.nh.gov or call the Forms Line at (603) 230-5001.

NEED HELP?
Call the Department of Revenue Administration, Taxpayer Services at (603) 230-5920. Individuals with hearing or speech impairments may call TDD
Access: Relay NH 1-800-735-2964.

NH-1040 Instructions 2023                                                                                                                                 Page 1 of 5
Version 1     11/2023

                                                                                                             PROPRIETORSHIP BUSINESS 
                           New Hampshire                                   2023
                                                                                                                        PROFITS TAX RETURN
                                Department of  
                           Revenue Administration                          NH-1040                           LINE-BY-LINE INSTRUCTIONS

NAME AND TAXPAYER IDENTIFICATION NUMBER
Enter the taxpayer's name and taxpayer identification number in the spaces provided. 
Enter the beginning and ending dates of the taxable period.
NOTE: Spouses may NOT combine net results of separately held business organizations; separately owned businesses must file a separate NH-1040, together with all 
other applicable forms and schedules, under their own taxpayer identification number. Jointly owned property is reported on the same NH-1040. Limited Liability 
Companies owned by individuals and reported on their Federal Form 1040 must file a separate Form NH-1040. All applicable federal forms, including, but not limited 
to, Schedules C, D, E, F, and Forms 4835, 4797, or 6252, as applicable, must be attached.

LINES 1(a)-1(j) - GROSS BUSINESS PROFITS
The Business Profits Tax is a 7.5% (for taxable periods ending on or after December 31, 2023)tax assessed on taxable business profits. 
Round every entry to the nearest whole dollar (if 49 cents or less round down, if 50 cents or more round up).   
REPORT NEGATIVE AMOUNTS USING A MINUS SIGN. 
The following describes items of income and deductions reported on Federal Form 1040 and how these items should be reported on Form NH-1040:

                            1040 BUSINESS ACTIVITY NOT REGISTERED AS A SINGLE MEMBER LIMITED LIABILITY COMPANY (SMLLC)  
                                                                                 OR  
                                   SINGLE MEMBER LIMITED LIABILITY COMPANY (SMLLC) FILING AS A PROPRIETORSHIP    

The total net profit or loss from all business activities owned by an individual, or jointly owned with a spouse, reported on, but not limited to, Federal Form 1040; 
Schedules B, C, D, E, F, and Forms 4835, 4797, and 6252, that relate to a proprietorship conducting business activity as a business, profession, rental, or farm, including 
any gain or loss derived from the sale of assets held or used in the business activity. 
LINE 1(a) 
Report the net profit or loss, Federal Schedule C, Line 31 before application of excess farm loss rules, the at-risk rules, and passive activity loss rules. If the Federal Form 
1040 is a joint return and there is more than one Schedule C on the Federal Form 1040, report only the Schedule C income or loss that is attributable to the same 
individual. A separate Form NH-1040 must be filed if the spouse operates a different business. 
LINE 1(b) 
Report the net rental profit or loss, Federal Schedule E, Line 21. If the Federal Form 1040 is a joint return and the property is jointly owned, report as a single business 
activity. Separately owned property must be reported on a separate New Hampshire BPT return by the owner of the property. 
LINE 1(c) 
Report the net farm rental profit or loss, Federal Form 4835, Line 32.  
LINE 1(d) 
Report the net farm profit or loss, Federal Schedule F, Line 34. 
LINE 1(e) 
Report the net gain or loss from the sale of business assets, Federal Form 4797, Line 2(g), 3, 5, 10(g), 14, 16 and 30. 
LINE 1(f) 
Report the net gain from sale of investment assets, Federal Schedule D, Lines 1(h), 2(h), 3(h), 8(h), 9(h) and 10(h). These are gains on assets not used in a  business 
activity, but are investments of the business organization as defined by New Hampshire Business Profits Tax Statute 77-A:1. 
LINE 1(g) 
Report the installment sale income from the sale of business assets recognized during the period, Federal Form 6252, Line 24. Report this amount  even if the business 
organization has ceased conducting business. 
Taxpayers who are reporting the sale of business assets on the installment basis for federal tax purposes must also use the installment method on Form NH-1040. 
Under certain conditions, an election can be made by using Form DP-95 to report the entire gain in the year of sale. Form DP-95 may be obtained by calling the Forms 
Line at (603) 230-5001 or from the Department's website at: www.revenue.nh.gov. 
Taxpayers who have sold business or rental property on the installment basis will be considered a business organization until all the installments have been reported 
and the total tax paid. You MUST file a return every year, regardless of the amount of installments, if the gross sale price exceeded the filing threshold pursuant to RSA 
77-A:6. 
LINE 1(h) 
Report other net business income not reported above attributable to this business organization as adjusted accordingly from Federal Form 1040, Schedule B. (Attach 
schedule).
LINE 1(i)
Report other business income attributable to this business organization as adjusted accordingly from Federal Form 1040, Schedule 1, Line 8.
LINE 1(j) 
Subtotal Lines 1(a) through 1(i). 
NH-1040 Instructions 2023  
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                                                                                                                            PROPRIETORSHIP BUSINESS 
                                  New Hampshire  
                                                                                                      2023                     PROFITS TAX RETURN
                                          Department of  
                                  Revenue Administration                                    NH-1040                         LINE-BY-LINE INSTRUCTIONS 
                                                                                                                                   (continued)

LINES 2(a)  -2(g)         , 3, 4, AND 5 - INCREASE OR DECREASE TO GROSS BUSINESS PROFITS TO RECONCILE WITH IRC
Adjustments necessary to increase or decrease gross business profits to reflect the Internal Revenue Code (IRC) applicable pursuant to RSA 77-A:1, XX and RSA 77-A:3-b. 
Pursuant to RSA 77-A:1, XX, New Hampshire has adopted the IRC as of a particular date for each taxable period. As a result, taxpayers must identify any  changes to the 
IRC occurring subsequent to the version adopted by New Hampshire, and account for those changes on their return. Taxpayers must  also make additional adjustments 
as directed by RSA 77-A:3-b.  
                                                                        APPLICABLE INTERNAL REVENUE CODE
                                           TAXABLE PERIOD - BEGINNING                                         IRC VERSION IN EFFECT
                                                       01/01/2020 - Current                                   December 31, 2018
                                                      01/01/2018 - 12/31/2019                                 December 31, 2016
                                                      01/01/2017 - 12/31/2017                                 December 31, 2015
                                                      01/02/2000 - 12/31/2016                                 December 31, 2000
                                                                        For prior taxable periods reference RSA 77-A:1, XX  
The adjustments on lines 2(a) through 2(g) reflect the adjustments that are necessary to account for the version of the IRC adopted by New Hampshire. If a taxpayer 
seeks to report a necessary adjustment that has not been specifically addressed, the taxpayer shall enter the item on either line 2(c) or 2(e). 
The statutory requirement to follow the applicable IRC pursuant to RSA 77-A:1, XX and RSA 77-A:3-b has significant impact on the tax basis of assets used in businesses 
operating within New Hampshire, and also within and without New Hampshire. A separate accounting of the New Hampshire tax basis must be maintained for 
depreciation purposes and for determination of the gain or loss in the event of the sale of business assets.  
LINE 2(a) 
Add the amount of IRC §179 expense taken on the federal return in excess of the amount permitted pursuant to RSA 77-A:3-b. For property placed in  service on or 
after January 1, 2017, the maximum IRC § 179 deduction is $100,000. For property placed in service on or after January 1, 2018, the maximum IRC § 179 deduction is 
$500,000.  
LINE 2(b) 
Add the amount of bonus depreciation taken on the federal return for assets placed in service this period. Bonus depreciation, allowed federally under IRC §168(k), is 
not allowed for New Hampshire BPT purposes. 
LINE 2(c) 
Add any other deductions or exclusions taken on the federal return that need to be eliminated or adjusted due to revisions to the IRC occurring  subsequent to the 
applicable version in the table above. Include foreign dividends, when actually distributed, that consist of amounts previously taxed federally as GILTI under IRC §951A, 
or of amounts previously taxed federally as deemed one-time repatriation under the Tax Cuts and Jobs Act of 2017, but not previously subject to the Business Profits 
Tax. Complete and attach Form Schedule IV. 
LINE 2(d) 
Deduct additional depreciation related to IRC §179 and bonus depreciation not allowed for this tax year or for prior tax years. Because there may be a  basis difference 
due to the federal and state treatment of IRC §179 expense, and bonus depreciation, the regular depreciation allowed under IRC §167 and IRC §168 may be different 
than that deducted on the federal return. Recalculate your allowable depreciation and deduct the difference on this line. 
LINE 2(e) 
Deduct any other items included on the federal return that are required to be eliminated or adjusted due to revisions to the IRC occurring subsequent to the version 
adopted by New Hampshire pursuant to RSA 77-A:1, XX and RSA 77-A:3-b. Also include the deduction allowed for global intangible low-taxed income under RSA 77-
A:4, XIX. Complete and attach Form Schedule IV. 
LINE 2(f) 
Increase or decrease the net gain or loss on the sale of assets used in the business which have a different state adjusted basis from the tax adjusted  basis reported on 
the federal return. Because there may be a basis difference to the federal and state treatment of IRC §179 expense, and bonus depreciation,  the regular depreciation 
pursuant to IRC §167 and IRC §168 allowed by New Hampshire may be different than the federal return. This may create a different  adjusted basis to assets used in the 
business which have not been completely depreciated and thus a different gain or loss for state reporting than that reported  on the Federal Return on the sale of 
business assets. Recalculate the gain or loss and enter the difference on this line. Adjustments required to account for the  net gain or loss attributable to an increase or 
step-up in the basis of assets pursuant to RSA 77-A:4, XIV shall be reported in Section 6(h).  
LINE 2(g) 
The sum of Lines 2(a) through 2(c), minus Lines 2(d) and 2(e), adjusted by Line 2(f); if negative result, use a minus sign. 
LINE 3 
Subtotal Line 1(j) adjusted by Line 2(g); if negative result, use a minus sign. 
LINE 4 
Separate entity adjustments to income or expense, attach schedule. Enter the amounts which arise from the necessity of adjusting Gross Business Profits to 
accommodate the New Hampshire requirement of separate entity treatment for business organizations. Do not eliminate investment income on this line, as New 
Hampshire requires that all business income be included. New Hampshire does not have a non-business income statute. 

NH-1040 Instructions 2023 
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                                                                                                                 PROPRIETORSHIP BUSINESS 
                         New Hampshire                                            2023
                                                                                                                         PROFITS TAX RETURN
                                  Department of  
                                                                         NH-1040                                 LINE-BY-LINE INSTRUCTIONS 
                         Revenue Administration
                                                                                                                          (continued)

LINE 5 
Gross Business Profits, combine Line 3 and Line 4. 

LINES 6(a)-6(j), 7, 8, 9, 10, 11, 12, 13, AND 14 - ADDITIONS AND DEDUCTIONS (RSA 77-A:4)
LINE 6(a) 
Deduct interest or dividend income that is subject to taxation under RSA 77. Deduct the amount of the interest and dividends reported on the Interest  and Dividends 
Tax return (Form DP-10) on this line. 
LINE 6(b) 
Deduct interest income resulting from investments in direct United States obligations, net of expenses, on this line. Do not include amounts already deducted on 
Line 6(a). 
Federal obligations are exempt from tax by states or their political subdivisions when obligations are issued to secure credit to carry on the necessary functions  of 
government. Exempt U.S. Government interest claimed as a deduction must be reduced by the following expenses if the expenses were claimed as deductions in 
arriving at your federal taxable income: 
        •  interest on money borrowed to purchase or carry the bonds or securities; and 
        •  ordinary and necessary expenses paid or incurred in connection with producing exempt income. 
These expenses may also be added back on Line 6(f), do not add back twice.
LINE 6(c)
Deduct reasonable compensation for personal services performed by a proprietor, partner, or member for the business organization. A proprietorship or SMLLC whose 
proprietor or member perform services for the business organization may take a reasonable compensation deduction on the business organization's Business Profits 
Tax Return for services performed. If the compensation deduction exceeds $75,000, then the business organization must maintain business records to demonstrate 
that the deduction is reasonable. Refer to RSA 77-A:4, III and Rev 303.01 for additional information. 
If a business organization was unable to take a reasonable compensation deduction in a prior year(s) due to insufficient business profits, the business organization 
may adjust this year's compensation deduction to reflect the under-compensation in the prior year(s). However, the business organization must maintain records 
sufficient to demonstrate that intention. 
The amount of the deduction cannot reduce taxable business profits to less than zero. 
Reasonable compensation may also include an amount up to 15% of the gross selling price of a business asset less any amounts paid to other brokers or agents. This 
amount must represent the commissions attributable to the efforts of the proprietor or member acting as the broker or selling agent as provided in Rev 303.01.
LINE 6(d) 
Add net income taxes, franchise taxes measured by net income, or capital stock taxes taken as deductions on the federal return for any state or political subdivision, or 
foreign taxes based on or measured by net income.  
The Business Enterprise Tax (BET) is not based on or measured by net income and is not added back. Business Profits Tax (BPT) is based on net income and must be 
added back if a deduction for BPT has been taken on your federal return. 
LINE 6(e) 
Deduct the wage adjustment required by IRC §280C. Deduct the wages or salaries paid or incurred for the taxable year which is equal to the sum of the credits 
determined for the taxable year under IRC §45A(a), §51(a), §1396(a), §1400P(b), and §1400R.  
LINE 6(f) 
Add expenses related to constitutionally exempt income. Expenses that are incurred to produce income that is constitutionally exempt from taxation in  New 
Hampshire must be added back to gross business profits. These expenses include such items as interest expense and other expenses incurred to earn interest from 
investments in direct U.S. obligations. This add back also includes expenses related to the production of non-unitary income not included on this return. 
LINE 6(g) 
A deduction is allowed for the contribution of scientific equipment or apparatus to an educational organization or institute of higher education equal to the sum of 
the taxpayer's basis in the contributed property plus 50% of the unrealized appreciation, or twice the basis of the property, whichever is less. 
LINE 6(h) 
The following adjustments are required to account for the increase in the basis of assets federally due to the sale or exchange of an interest in the business 
organization: 
            LINE 6(h) - A
            Report the amount of the increase in the basis of assets federally, attributable to the sale or exchange of an interest in the business organization. If multiple 
            sales or exchanges, provide an aggregated figure, check the appropriate box(es) below, and attach a schedule of transactions. 
            CHECKBOX
            If making an election pursuant to RSA 77-A:4, XIV(b) to recognize the basis increase for any sale or exchange reported on Line 6(h ) - A, check the “Yes” box. If 
            reporting elections for multiple transactions check the “Yes” box and attach a schedule reporting the details for each transaction.
            LINE 6(h) - B
            If not making an election pursuant to RSA 77-A:4, XIV(b) to recognize the basis increase for a sale or exchange reported on Line 6(h) - A, deduct the basis 
            increase associated with the sale(s) or exchange(s) for which an election is NOT being made. If multiple sales or exchanges provide an aggregated figure and 
            attach a schedule of transactions.  
NH-1040 Instructions 2023
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                                                                                                            PROPRIETORSHIP BUSINESS 
                         New Hampshire                                         2023                             PROFITS TAX RETURN
                                Department of  
                                                                                                            LINE-BY-LINE INSTRUCTIONS 
                         Revenue Administration                                NH-1040
                                                                                                                           (continued)

            LINE 6(h) - C
            Add the amount of depreciation claimed on the federal return that is attributable to an increase in the basis of assets that has not been recognized for NH 
            purposes pursuant to RSA 77-A:4, XIV(a)(1). 
            For sales or exchanges occurring on or after January 1, 2016, an entry on this line is required to account for federally reported depreciation attributable to an  
            increase in the basis of assets attributable to a sale or exchange transaction where an election to recognize the basis increase pursuant to RSA 77-A:4, XIV(b) 
            was not made in the current taxable period, or a prior taxable period, for the economic life of the assets in question.   
            For sales or exchanges occurring before January 1, 2016, an entry on this line is required to account for federally reported depreciation attributable to an 
            increase in the basis of assets attributable to a sale or exchange transaction where an addition to gross business profits was not made in accordance with Rev 
            303.05, for the economic life of the asset(s) in question.
            LINE 6(h) - D
            Adjust the gain or  loss with respect to the sale of assets to account for an increase in the basis of assets that was not recognized for NH purposes pursuant to 
            RSA 77-A:4, XIV(a)(2).  
            For sales or exchanges occurring on or after January 1, 2016, an entry on this line is required to account for federally reported depreciation attributable to an  
            increase in the basis of assets attributable to a sale or exchange transaction where an election to recognize the basis increase pursuant to RSA 77-A:4, XIV(b) 
            was not made in the current taxable period, or a prior taxable period, upon the sale or disposition of the asset(s) in question.  
            For sales or exchanges occurring before January 1, 2016, an entry on this line is required to account for federally reported depreciation attributable to an 
            increase in the basis of assets attributable to a sale or exchange transaction where an addition to gross business profits was not made in accordance with Rev 
            303.05, upon the sale or disposition of the asset(s) in question.  
Enter the cumulative total of all items and adjustments reported on lines 6(h) - A through 6(h) - D.  
LINE 6(i) 
Add Qualified Investment Company ("QIC") holder's proportional share of QIC profits on this line. A business organization which holds an interest in a  QIC must add to 
gross business profits its share of the QIC profits for the year, losses are not deducted. If the QIC makes a distribution, do not include the distribution in gross business 
profits of the interest holder. 
LINE 6(j) 
Net Lines 6(a) through 6(i). 
LINE 7
Adjusted Gross Business Profits (combine Lines 5 and 6(j)).
LINE 8 - NEW HAMPSHIRE APPORTIONMENT 
Business organizations which have business activity, including rental activity, both inside and outside this state AND which are subject to income taxes (or a franchise 
tax measured by net income) in another state or are subject to the jurisdiction of another state to impose a net income tax or capital stock tax upon it, whether or not 
actually imposed by the other state, must apportion gross business profits to New Hampshire by using Form DP-80, Apportionment of Income. Form DP-80 may be 
obtained from the Department's website at www.revenue.nh.gov or by calling the Forms Line at (603) 230-5001. 
After completing Form DP-80, enter the apportionment to six decimal places on Line 8. All others enter 1.00 on Line 8. A business organization whose activities do not 
exceed the protection of P.L. 86-272 shall claim the exemption by checking the box and entering 0.00 on Line 8. 
LINE 9 
Enter New Hampshire Business Profits before NOL. Enter the product of Line 7 multiplied by Line 8. If negative, enter zero.
LINE 10 
Deduct the allowable net operating loss carry forward from a prior year on this line. Use Forms DP-131-A and DP-132 to calculate this deduction. 
The Net Operating Loss Deduction (NOLD) must be apportioned to the taxable period(s) in which the loss occurred, to determine the amount of the carry forward 
based on the apportionment reported on Form DP-80 in the year of the loss. Form DP-132 must be attached for this deduction. You must report the NOLD available 
on Line 10-A and the amount of NOLD to be carried forward on Line 10-B. Refer to RSA 77-A:4, XIII and Rev 303.03 for more information. 
LINE 11  
New Hampshire Taxable Business Profits. Line 9 minus Line 10. If this is a negative number, enter zero.
LINE 12 
Enter the product of Line 11 multiplied by 7.5% (for taxable periods ending on or after December 31, 2023). 
LINE 13(a) - CREDITS
If you have paid the BET in this tax period, or have carry over BET credits from the the tax period ending on or after December 31, 2014, and have no other credits, 
enter the BET credit here, and you must include the Business Enterprise Tax Credit Worksheet, Form BET-CW.
LINE 13(b) 
If you have credits in addition to the BET credit enter the total credits available on this line. Do not also enter BET credits on Line 13(a). (Attach Form DP-160; only use 
Form DP-160 if you have available credits other than BET). 
LINE 14 
New Hampshire Business Profits Tax Net of Statutory Credits (Line 12 minus Line 13(a) or Line 13(b)). The amount cannot be less than zero. Enter the amount from Line 
14 on Line 1(b) of the NH BT- Summary Form.  
NH-1040 Instructions 2023
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