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
Bracket thresholds below reflect the last confirmed structure — confirm exact current-year thresholds with New Mexico Taxation and Revenue.
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
Confirm current-year exemption amounts with New Mexico Taxation and Revenue, as these were not independently re-verified this session.
New Mexico Retirement Income
Social Security Exemption
Confirm current AGI thresholds with New Mexico Taxation and Revenue. The state has historically fully exempted Social Security below a set AGI threshold, with gradual phase-in of taxation above it.
Other Retirement Income
Confirm current exemption amounts for pension income with New Mexico Taxation and Revenue, as this figure was not independently re-verified this session.
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)
- A limited amount of qualifying pension income
- New Mexico municipal bond interest
New Mexico vs. Neighboring States
| State | Top Income Tax Rate (confirm current figures) |
|---|---|
| Texas | 0% (no income tax) |
| Arizona | 2.5% (flat) |
| Colorado | 4.4% (flat) |
| Oklahoma | Confirm current top rate |
| New Mexico | 5.9% |
| Utah | 4.45% (flat, cut from 4.5% by SB 60, March 2026) |
New Mexico has one of the highest top rates among its neighbors.
New Mexico Rebates and Credits
Confirm current amounts and eligibility rules with New Mexico Taxation and Revenue, as these programs are periodically adjusted:
Working Families Tax Credit
A percentage of the federal EITC, refundable.
Low Income Comprehensive Tax Rebate
Available to lower-income taxpayers to offset regressive taxes.
Child Tax Credit
Confirm the current per-child credit amount and income limits.
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 a traditional sales tax. Instead:
| Rate | Application |
|---|---|
| State rate | Confirm current rate (historically around 5%) |
| Local rates | Confirm current range |
The Gross Receipts Tax is similar to sales tax but technically different (it’s imposed on the seller, not the buyer, though generally passed through in pricing).
New Mexico Property Tax
Confirm the current average effective property tax rate with the Tax Foundation or New Mexico Taxation and Revenue, as this figure was not independently re-verified this session. New Mexico property taxes have historically been below the national average.
Tips to Reduce New Mexico Taxes
- Social Security strategy — stay under the current AGI exemption threshold
- Pension exemption — confirm current amount
- 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 several neighboring states. However, Social Security is exempt for most taxpayers under the current AGI threshold, and a pension exclusion provides some relief. The gross receipts tax (similar to sales tax) applies broadly. Property taxes are below average. Texas (no income tax) and Arizona (2.5% flat) offer significantly lower tax burdens for those willing to relocate.
For a side-by-side comparison of every state’s income tax rates, see state income tax rates by state 2026 and best and worst states for taxes 2026. Federal income tax applies on top of state taxes — see 2026 federal income tax brackets to calculate your combined liability.
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