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New Mexico Personal Income Tax Laws

Residents of a few states are lucky enough to not have to pay state income taxes in addition to federal income taxes, including those living in neighboring Texas. Unfortunately, people who call New Mexico home or earn income in New Mexico do have to pay a state tax on their income as well. To learn more about the primary personal income tax laws and tax rate in New Mexico, see the following table.

Code Sections New Mexico Statutes Chapter 7, Article 2: Income Tax General Provisions
Who is Required to File? New Mexico residents owe personal income tax on their net income and must file if they file a federal return or want to claim a refund of state taxes withheld from their pay or claim other rebates or credits.

Non-residents with income from business, employment, or property in New Mexico must also file, including estates and trusts.
Income Tax Rate The income tax rate you pay in New Mexico varies based on the amount of income you earn and your filing status, single, married filing separately, or heads of household, surviving spouses, and married individuals filing jointly.

Since 2008, for married individuals filing separate returns:

  • Not over $4,000 is taxed at 1.7% of the total taxable income
  • $4,000 to $8,000 – $68 plus 3.2% of excess over $4,000
  • $8,000 to $12,000 – $196 plus 4.7% of excess over $8,000
  • Over $12,000 – $384 plus 4.9% of excess over $12,000

For heads of household, surviving spouses, and married couples filing joint returns:

  • Not over $8,000 – 1.7%
  • $8000 to $16,000 – $136 plus 3.2% of excess over $8,000
  • $16,000 to $24,000 – $392 plus 4.7% of excess over $16,000
  • Over $24,000 – $768 plus 4.9% of excess over $24,000

 

For single individuals and for estates and trusts:

  • Not over $5,500 – 1.7%
  • $5,500 to $11,000 – $93.50 plus 3.2% of excess over $5,500
  • $11,000 to $16,000 – $269.50 plus 4.7% of excess over $11,000
  • Over $16,000 – $504.50 plus 4.9% of excess over $16,000
Federal Income Tax Deductible No.
Federal Income Used as Basis Yes.

New Mexico State Income Tax Exemptions

Fortunately, some individuals are eligible for exemptions from part of their income tax. For example, people aged 65 or older, who are blind, or who are low or middle income tax payers are partially exempt. Persons over 100 years old are exempt from New Mexico state income tax. Also, members of federally recognized tribes who earn income from work within the boundaries of the tribe’s reservation or pueblo are exempt from state income tax for those earnings.

Getting Help with Taxes

Because paying your taxes and general tax law can be very confusing and you may be eligible for a variety of tax exemptions, it’s best to consult a tax expert when filing your taxes. If you run into difficulty, such as allegedly owing back taxes to the state, you may need to hire an experienced tax lawyer in New Mexico.

Note: State laws change regularly. Please conduct your own legal research or contact a lawyer to confirm the accuracy of these tax laws.

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