New Mexico individual income tax
New Mexico levies an individual income tax on both residents and nonresidents, calculated using their federal-adjusted gross income, with rates ranging from 1.7% to 5.9%.
April 18
Return due in 2023
5.9%
Top marginal tax rate
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Pay income tax online
Visit the official state government’s website to pay individual income tax online.
Visit TaxNewMexico
What is New Mexico income tax?
Individual income tax
Individual income tax is a type of direct tax levied by New Mexico on individuals that meet the taxable criteria.
Taxable incomes
New Mexico taxes incomes from wages, dividends, interests and capital gains.
Tax brackets
New Mexico has 7 individual income tax brackets from 1.7% to 5.9%.
Standard deduction
Standard deduction is $12,950 for single filers and $25,900 for joint filers for the year 2022.
Personal exemption
New Mexico doesn't have personal exemption.
2022 tax rates
The following is the list of income tax rates for the tax year of 2022
| New Mexico taxable income | Tax rate |
|---|---|
| $0 - $4,000 | 1.7% |
| $4,000 - $8,000 | 3.2% |
| $8,000 - $12,000 | 4.7% |
| $12,000 - $157,500 | 4.9% |
| $157,500+ | 5.9% |
Individual income tax
The State of New Mexico requires you to pay taxes if you are a resident (regardless of the whether they were earned within the state or not) or a non-resident that earns income from New Mexico
Types of taxable incomes
The income types on which tax is levied are:
In New Mexico, all types of income are generally subject to personal income tax unless they are specifically exempt by state law. This includes, but is not limited to, wages and salary, dividends, capital gains, royalties, and other types of income.
File return
To file a tax return in New Mexico, taxpayers must complete and submit a tax return form. The tax return form requires taxpayers to report their taxable income and any credits or deductions they are eligible to claim. Taxpayers must also calculate their tax liability and pay any taxes owed by the due date.
Due
quarterly or annually
Pay taxes
Taxes in New Mexico are due by 18 April, 2023. Go to the official New Mexico Taxation & Revenue's website.
In New Mexico, you are required to pay quarterly estimated taxes if you tax liability after withholding and credits is more than $500.
Estimated taxes are to be made quarterly in instalments by the 15th of April, June, September, and January.
Type of tax
graduated tax
Due
quarterly or annually
Deductions
Tax deductions are a reduction in the amount of income that is subject to taxation. It allows taxpayers to lower the amount of taxable income they have, which in turn reduces the amount of tax they owe. Tax deductions are available for a wide range of expenses, such as charitable donations, mortgage interest, medical expenses, and business expenses.
In New Mexico, standard deduction is $12,950 for single filers and $25,900 for joint filers for the year 2022.
Credits
A tax credit allows taxpayers to reduce the amount of taxes they are required to pay. This is different from a tax deduction, which reduces the amount of income that is subject to taxation. Tax credits are applied directly to the tax liability, while deductions are applied to the taxable income.
Exclusions
Tax exclusions are an amount of money or income that is not subject to taxation. This means that taxpayers do not have to pay taxes on this income.
Residency
Residency in New Mexico refers to an individual's permanent home or place of residence in the state.
New Mexico resident
A New Mexico resident is someone who is domiciled in New Mexico, or who maintains a permanent place of residence in the state.
Any person who is physically present in New Mexico for more than 185 days is also considered a resident.
New Mexico First-Year Resident
If you moved to New Mexico during the tax year with the intention of making it your permanent residence, you are considered a first-year resident. It is not necessary for a first-year resident to have physically lived in New Mexico for at least 185 days.
First Year Resident is can come into the state any time during the year and should be present on Dec 31st.
New Mexico part-year resident
A New Mexico Part-Year Resident is someone who moved into or out of the state during the tax year.
A taxpayer is considered a part-resident if he/she is not domiciled in the state on Dec 31st.
Income earned while the individual was a resident of New Mexico is subject to state taxes.
New Mexico non-resident
A New Mexico Nonresident is someone who does not have a permanent residence in the state.
Nonresidents who receive income from New Mexico sources are required to pay New Mexico taxes.
Frequently asked questions
Business entities in New Mexico
There are several business entities in New Mexico
New Mexico LLC
Page sponsorWhy we like StartGlobal?
My genuine thoughts
Willy Justin
Founder, Statepedia
StartGlobal: Legal + Taxes + Bookkeeping for solopreneurs
Product
For small businesses, managing taxes, accounting and everything legal is just a pain. Nobody wants to do it, but they have to. Instead of working with CPAs, attorneys and others separately, Start brings all of them under a single subscription. It’s just smooth.
Team
I know the team behind StartGlobal very well. It’s a very hardworking group of individuals who are genuinely passionate about small businesses. They are backed by successful founders like Balaji Srinivasan, Biz Stone(Twitter) and others.
Price
Getting a CPA or attorney is a matter of thousands of dollars. It’s just unfair to pay so much when you’re a small business. Start has a single subscription that covers it all. It is a definite money saver.
$599 one-time