New Mexico State Income Tax Guide

New Mexico uses a graduated income tax system, meaning your income is taxed at different rates depending on your earnings. For the 2024 tax year (the taxes you’ll file in 2025), tax rates range from 1.7% to 5.9%, with higher earnings being taxed at higher rates.

Your income level, filing status, residency, and available deductions or credits all influence your tax liability. Although the rates are relatively moderate compared to other states, tax credits and deductions can significantly affect the amount you owe.

Let’s break down what you need to know about New Mexico state income tax for the upcoming tax season.

*Note that you are still responsible for federal taxes if you meet the IRS income filing threshold. This article addresses state-specific taxes only.  

New Mexico state income tax rates

New Mexico has a graduated state income tax, with rates ranging from 1.7% to 5.9%. The state applies these rates progressively, meaning it taxes higher portions of your income at higher rates. The 5.9% top rate applies to people earning above a specific income threshold, depending on filing status.

State income tax returns are due on April 15, 2025, aligning with the federal tax deadline—unless you request a state-approved extension.

In the following sections, we’ll break down New Mexico’s income tax brackets and rates based on different filing statuses—including single filers, married couples, and heads of households—to help you understand your tax responsibilities.

Single

The following table outlines the New Mexico state income tax rates for individuals filing as single in tax year 2024.

Taxable income Tax rate $0 to $5,500 1.7% of taxable income $5,501 to $11,000 $93.50 plus 3.2% of excess over $5,500 $11,001 to $16,000 $269.50 plus 4.7% of excess over $11,000 $16,001 to $210,000 $504.50 plus 4.9% of excess over $16,000 $210,001 and more $10,010.50 plus 5.9% of excess over $210,000

Head of household and married filing jointly

Taxpayers filing as head of household or married filing jointly in New Mexico have higher income thresholds than single filers for each tax bracket. The table below outlines the 2024 New Mexico state income tax rates for these filing categories.

Taxable income Tax rate $0 to $8,000 1.7% of taxable income $8,001 to $16,000 $136 plus 3.2% of excess over $8,000 $16,001 to $24,000 $392 plus 4.7% of excess over $16,000 $24,001 to $315,000 $768 plus 4.9% of excess over $24,000 $315,001 and more $15,027 plus 5.9% of excess over $315,000

Married filing separately

The table below outlines the 2024 state income tax rates for taxpayers in New Mexico filing as married filing separately.

Taxable income Tax rate $0 to $4,000 1.7% of taxable income $4,001 to $8,000 $68 plus 3.2% of excess over $4,000 $8,001 to $12,000 $196 plus 4.7% of excess over $8,000 $12,001 to $157,500 $384 plus 4.9% of excess over $12,000 $157,501 and more $7,513.50 plus 5.9% of excess over $157,500

Source: Taxation and Revenue New Mexico

What is the standard deduction in New Mexico?

The standard deduction reduces your taxable income, lowering the amount of income subject to state taxes. Taxpayers often opt to take the standard deduction if it exceeds their itemized deductions or simplifies the filing process. New Mexico follows the federal standard deduction amounts for the state return. Here are the standard deduction amounts for 2024:

Married couples filing jointly: $29,200

Single filers and married filing separately: $14,600

Head of household: $21,900

Who has to file New Mexico state income tax?

In New Mexico, filing requirements depend on residency status and income sources. You must file a state income tax return if you meet the following conditions:

Residents

You must file if you:

File a federal tax return.

Want to claim a refund of New Mexico state taxes withheld from your pay.

Want to claim any state-specific rebates or credits.

Part-year residents

You must file if you:

Were a New Mexico resident for part of the year and earned income sourced from the state.

Earned income sourced from New Mexico during the part of the year you were not a resident.

Nonresidents (including foreign nationals)

You must file if you:

Have a federal filing requirement.

Earned income from any New Mexico source.

Military servicemembers

You must file a resident return if:

New Mexico was your home at the time of enlistment.

You have not changed your home for state tax withholding purposes.

Members of Indian nations, tribes, or pueblos

Income earned outside the boundaries of your reservation, pueblo grant, or Indian country is subject to New Mexico personal income tax.

How New Mexico residency impacts tax filing

New Mexico categorizes taxpayers into three residency statuses: resident, part-year resident, and nonresident. Your residency status determines which income is taxable in New Mexico and what forms you’ll need to file.

The chart below outlines each residency status, who qualifies, and how income is taxed:

Status Definition How New Mexico taxes income Resident New Mexico was your home all year, or you were physically present for at least 185 days in the tax year. Taxed on all income, regardless of where it was earned. Part-year resident You were a resident for part of the year, not present for 185 days, and had domiciled elsewhere by December 31. Taxed on income earned while a resident and income sourced from New Mexico. Nonresident New Mexico was not your home, and you were not physically present for at least 185 days during the tax year. Taxed only on New Mexico-sourced income.

Other income tax considerations in New Mexico

In addition to standard wages and salaries, retirement income, investments, Social Security, and military income are taxed differently in New Mexico. Below are key points to help you understand how these unique income types are taxed.

Retirement and pension income tax:

Taxpayers 65 and older may exempt up to $8,000 of retirement income, depending on income level. Retirement income above this amount, such as pensions and IRA disbursements, is taxable.

Retirement or pension income for members of federally recognized Indian nations, tribes, or pueblos is exempt for those who both lived and were employed within reservation boundaries.

Investment income tax: Capital gains are taxed at the same rates as ordinary income.

Social Security income tax: Social Security benefits are tax-exempt for:

Single filers with income under $100,000

Married couples filing jointly, heads of household, or surviving spouses with income under $150,000

Married couples filing separately with income under $75,000

Military income tax: Nonmilitary pay is taxable. However:

Active-duty income earned by military members is exempt from New Mexico personal income tax.

Military presence in New Mexico due to orders does not change residency status.

A New Mexico resident on active military duty remains a resident for tax purposes.

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Common New Mexico state tax rebates and credits

New Mexico offers several tax deductions and credits to reduce taxable income or directly lower your tax liability. Below are key state-specific deductions and credits.

Tax credit Description Amount Property Tax Rebate For taxpayers 65 and older with incomes below $16,000. Up to $250. Child Day Care Credit Available for taxpayers with incomes $30,160 or less to offset child care costs. Up to $1,200. Child Income Tax Credit Credit for each qualifying child, based on income level. Up to $622 per child. Refundable Medical Care Credit For taxpayers 65 and older to cover medical expenses. Up to $2,800. Special Needs Adopted Child Tax Credit Credit for adopting a qualifying child with special needs. $1,500 per child ($750 per child if married filing separately). Working Families Tax Credit Based on the federal Earned Income Credit (EIC). 25% of the EIC; federal EITC maximum is $7,830 for 2024 tax year.

How to file New Mexico state income tax

Navigating New Mexico state income taxes—from residency rules to deductions and credits—can be overwhelming, but TurboTax makes the process simple and stress free.

File with confidence: TurboTax ensures you get every deduction and credit you qualify for in New Mexico.

Choose your approach: Whether you want to file on your own with guidance or let a TurboTax expert handle everything, we’ve got you covered.

Maximize your refund: TurboTax is designed to uncover every savings opportunity, no matter your filing status—resident, nonresident, or part-year resident.

Filing your taxes doesn’t have to be stressful. With TurboTax, you’ll have the tools and expert help to file accurately and get your maximum refund. It doesn’t matter whether you do your taxes on your own or get help from a professional.

Ready to tackle your New Mexico state taxes? Connect with a local tax expert in New Mexico today, and let us handle the hard part.

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