How much is New Mexico income tax?
New Mexico income tax at 3 levels of New Mexico taxable income — what is left after New Mexico's own deductions and exemptions. Local income taxes are not included.
| Taxable income | Single | Married filing jointly |
|---|---|---|
| $50,000 | $1,9413.9% effective · 4.7% marginal | $1,7393.5% effective · 4.7% marginal |
| $100,000 | $4,3584.4% effective · 4.9% marginal | $4,0894.1% effective · 4.9% marginal |
| $250,000 | $12,1084.8% effective · 5.9% marginal | $11,4394.6% effective · 4.9% marginal |
What are New Mexico's income tax brackets for 2026?
| Taxable income | Rate |
|---|---|
| Up to $5,500 | 1.5% |
| Over $5,500 up to $16,500 | 3.2% |
| Over $16,500 up to $33,500 | 4.3% |
| Over $33,500 up to $66,500 | 4.7% |
| Over $66,500 up to $210,000 | 4.9% |
| Over $210,000 | 5.9% |
| Taxable income | Rate |
|---|---|
| Up to $8,000 | 1.5% |
| Over $8,000 up to $25,000 | 3.2% |
| Over $25,000 up to $50,000 | 4.3% |
| Over $50,000 up to $100,000 | 4.7% |
| Over $100,000 up to $315,000 | 4.9% |
| Over $315,000 | 5.9% |
Source: NMSA 1978 §7-2-7, checked September 11, 2026.
Can you deduct New Mexico income tax on your federal return?
The federal deduction for state and local taxes (SALT) is capped at $40,400 for 2026 — $20,200 if married filing separately — and the cap shrinks toward $10,000 once modified AGI passes $505,000. A single filer with $250,000 of New Mexico taxable income owes about $12,108 in New Mexico income tax — 30% of that cap before any property tax.
SALT cap workaroundsDoes New Mexico have a pass-through entity tax (PTET)?
Yes. A partnership or S corporation can elect to pay New Mexico income tax at the entity level. The business deducts it federally, so that state tax is not limited by the SALT cap, and the owners claim a New Mexico credit or exclusion for it. Check your state's election deadline.
PTET savings calculatorWhen are New Mexico estimated tax payments due?
New Mexico estimated tax is due April 15, June 15, September 15 and January 15 of the following year, in 4 equal installments. Those are the same dates as the federal schedule. Source: Form RPD-41272 (2025), Calculation of Estimated Personal Income Tax Underpayment Penalty (Rev. 09/08/2025).
Safe-harbor calculatorWhat is the penalty for underpaying New Mexico estimated tax?
New Mexico charges the federal underpayment rate on an underpaid installment. Paying at least 90% of this year's tax or 100% of last year's on time avoids it. No estimated payments are required if you expect to owe less than $1,000. Source: Form RPD-41272 (2025), Calculation of Estimated Personal Income Tax Underpayment Penalty (Rev. 09/08/2025).
Are HSA contributions deductible in New Mexico?
Yes. New Mexico follows the federal treatment, so an HSA contribution — up to $4,400 with self-only coverage or $8,750 with family coverage for 2026 — lowers New Mexico taxable income as well as federal.
Does New Mexico give a tax break for 529 plan contributions?
Yes. New Mexico lets you deduct contributions to New Mexico's own 529 plan with no annual dollar limit. Income limits, per-beneficiary caps and carryforwards differ by state, so check the plan's rules.
529 plan tax savings calculatorWhat is the property tax rate in New Mexico?
New Mexico's average effective property tax rate is 0.7% — the 35th highest of 51 jurisdictions and 78% of the national average of 0.9%. That is about $700 a year for every $100,000 of home value; the rate varies widely by county and school district.
Itemize or take the standard deduction?How much does an LLC cost to keep in New Mexico each year?
Deductsy's table has no annual report fee or minimum franchise tax for a New Mexico LLC. Fees change, so confirm with New Mexico's business filing office.
New Mexico S-corp tax calculatorHow do New Mexico taxes compare with neighboring states?
| State | Top income tax rate | Income tax on $100,000 (single) | Property tax (avg) |
|---|---|---|---|
| New Mexico | 5.9% | $4,358 | 0.7% |
| Arizona | 2.5% | $2,500 | 0.48% |
| Colorado | 4.4% | $4,400 | 0.48% |
| Oklahoma | 4.5% | $4,285 | 0.8% |
| Texas | None | $0 | 1.49% |
On $100,000 of taxable income a single filer's New Mexico income tax is $4,358 — more than in 3 of 4 neighboring states. The lowest is Texas at $0; the highest is Colorado at $4,400. New Mexico's average property tax rate is higher than in 2 of 4.
Income tax is each state's own tax on the same state taxable income; local income taxes are not included.
Tax moves that matter most for New Mexico
If you own an S corporation, partnership or multi-member LLC, New Mexico's PTET election moves the New Mexico income tax on that profit to the business, where it is deductible federally and outside the SALT cap.
An S-corp election can cut self-employment tax once profit is large enough to pay yourself a reasonable salary and still cover payroll and filing costs. The New Mexico calculator adds New Mexico's own entity fees and taxes to that breakeven.
With 1099 income, a Solo 401(k) can take up to $72,000 a year (2026) — usually more than a SEP-IRA at the same income. Contributions lower both federal and New Mexico income tax.
Run your New Mexico numbers
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