New Mexico Income Tax Guide: Rates, Brackets & Rebates for 2026
Updated
New Mexico has progressive income tax rates from 1.7% to 5.9% — with generous Social Security exemptions and various rebate programs.
New Mexico Income Tax Rates for 2026
Single Filers
Taxable Income
Tax Rate
$0 - $5,500
1.7%
$5,500 - $11,000
3.2%
$11,000 - $16,000
4.7%
$16,000 - $210,000
4.9%
Over $210,000
5.9%
Married Filing Jointly
Taxable Income
Tax Rate
$0 - $8,000
1.7%
$8,000 - $16,000
3.2%
$16,000 - $24,000
4.7%
$24,000 - $315,000
4.9%
Over $315,000
5.9%
New Mexico Tax Calculator Examples
Example 1: $75,000 Single Filer
Component
Calculation
Tax on first $5,500 (1.7%)
$94
Tax on $5,500-$11,000 (3.2%)
$176
Tax on $11,000-$16,000 (4.7%)
$235
Tax on $16,000-$75,000 (4.9%)
$2,891
Total New Mexico tax
$3,396
Effective rate
4.53%
Example 2: $150,000 Married Filing Jointly
Component
Calculation
Tax on first $8,000 (1.7%)
$136
Tax on $8,000-$16,000 (3.2%)
$256
Tax on $16,000-$24,000 (4.7%)
$376
Tax on $24,000-$150,000 (4.9%)
$6,174
Total New Mexico tax
$6,942
Effective rate
4.63%
New Mexico Deductions
Standard vs. Itemized
New Mexico uses federal adjusted gross income as a starting point, with modifications. Taxpayers can:
Use the federal standard deduction calculation
Or itemize deductions
Personal Exemptions
Exemption Type
Amount
Personal exemption
$4,000
Dependent
$4,000
65+
Additional credits
Blind
Additional credits
New Mexico Retirement Income
Social Security Exemption
Filing Status
AGI Threshold
SS Tax Treatment
Single
Under $100,000
Fully exempt
Married
Under $150,000
Fully exempt
Above thresholds
Partial to full taxation
Gradual phase-in
Other Retirement Income
Income Type
Tax Treatment
Federal pensions
Partially exempt ($8,000)
State/local pensions
Partially exempt ($8,000)
Military retirement
Partially exempt
Private pensions
Taxable
401(k)/IRA
Taxable
New Mexico offers an $8,000 exemption for certain pension income.
What Income is Taxed in New Mexico?
Taxed:
Wages and salaries
Self-employment income
Interest and dividends
Capital gains (taxed as ordinary income)
Retirement income (above exemptions)
Rental income
Not taxed or fully exempt:
Social Security (under income thresholds)
First $8,000 of qualifying pensions
New Mexico municipal bond interest
New Mexico vs. Neighboring States
State
Top Income Tax Rate
Texas
0% (no income tax)
Arizona
2.5% (flat)
Colorado
4.4% (flat)
Oklahoma
4.75%
New Mexico
5.9%
Utah
4.55% (flat)
New Mexico has the highest top rate among its neighbors.
New Mexico Rebates and Credits
Working Families Tax Credit
Federal EITC
NM Credit
Based on federal EITC
Percentage of federal
Refundable
Yes
Low Income Comprehensive Tax Rebate
Available to lower-income taxpayers to offset regressive taxes.
Child Tax Credit
Children
Credit Amount
Per qualifying child
Up to $175
Income limits apply
Yes
Filing New Mexico State Taxes
Filing Requirement
Details
Form
PIT-1
Due date
April 15
E-file
Yes, through Taxpayer Access Point
Extension
Automatic 6 months with federal
New Mexico Gross Receipts Tax
New Mexico doesn’t have traditional sales tax. Instead:
Rate
Application
State rate
5.0%
Local rates
0.375% - 3.9375% additional
Total range
5.375% - 8.9375%
The Gross Receipts Tax is similar to sales tax but technically different.
New Mexico Property Tax
Average effective rate: ~0.70% (below national average)
Veteran exemptions available
Head of household exemptions
Favorable for homeowners
Tips to Reduce New Mexico Taxes
Social Security strategy — Stay under $100K/$150K AGI
Pension exemption — $8,000 excluded
Claim all credits — Working families, child credits
Retirement timing — Consider AGI thresholds
Consider Arizona — Much lower rates (2.5% flat)
New Mexico Tax Authority
New Mexico Taxation and Revenue Department
Website: tax.newmexico.gov
Phone: 505-827-0700
For refunds, returns, and questions
Bottom Line
New Mexico has progressive income tax from 1.7% to 5.9% — higher than neighboring states. However, Social Security is fully exempt for most taxpayers (under $100K/$150K AGI), and an $8,000 pension exclusion provides some relief. The gross receipts tax (similar to sales tax) ranges from 5.4% to 8.9%. Property taxes are below average at 0.70%. Texas (no income tax) and Arizona (2.5% flat) offer significantly lower tax burdens for those willing to relocate.