Key Tax Facts: New Mexico
- Social Security exempt for those with income below $100,000 (single)
- Low-income comprehensive tax rebate available
- Gross Receipts Tax (GRT) replaces traditional sales tax
- Military retirement pay is fully exempt
New Mexico State Income Tax Overview
New Mexico uses a graduated income tax with six brackets from 1.5% to 5.9% for single filers, reaching the top rate above $210,000. H.B. 252, enacted in March 2024, restructured the lower brackets: it added a new 4.3% bracket covering $16,500 to $33,500 for single filers and widened the 4.7% and 4.9% bands, leaving the 5.9% top rate unchanged. New Mexico uses the federal standard deduction, $15,000 for single filers and $30,000 for joint filers, and offers a $4,000 deduction for dependents in lieu of the suspended personal exemption. Social Security benefits are exempt for most filers below income thresholds, and New Mexico levies a gross receipts tax rather than a conventional sales tax.
New Mexico Income Tax Brackets (2025)
These are the New Mexico state income tax brackets for tax year 2025. New Mexico applies the same brackets to all filing statuses. Only the income within each bracket is taxed at that rate -- not your entire income.
| Taxable Income | Tax Rate |
|---|---|
| $0 - $5,500 | 1.5% |
| $5,500 - $16,500 | 3.2% |
| $16,500 - $33,500 | 4.3% |
| $33,500 - $66,500 | 4.7% |
| $66,500 - $210,000 | 4.9% |
| Over $210,000 | 5.9% |
Source: New Mexico Taxation and Revenue Department. New Mexico applies these brackets to all filing statuses.
What a New Mexico Resident Actually Pays: A Worked Example
Your effective tax rate is almost always lower than your top bracket. Here is how the math works for a single filer earning $65,000.
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Frequently Asked Questions -- New Mexico Income Tax
Does New Mexico have a state income tax?
Yes. New Mexico imposes a state income tax with a top marginal rate of 5.9%. This is separate from your federal income tax obligation.
What is the New Mexico income tax rate for 2025?
New Mexico uses a graduated income tax system with rates from 1.5% to 5.9%. Only the income within each bracket is taxed at that bracket's rate -- not your entire income.
Do I have to file a New Mexico state tax return?
Most full-year New Mexico residents with income above the state filing threshold must file a state return. Check the New Mexico Taxation and Revenue Department for current thresholds and requirements.
How accurate is this estimate?
This is a planning estimate of your federal income tax only. It does not calculate New Mexico state tax, and it does not account for state deductions, credits, exemptions, or local taxes. Use the New Mexico rate schedule above as a reference, and verify with official New Mexico tax forms or a qualified tax professional.
Does this calculator include federal income tax?
Yes. The calculator estimates your 2025 federal income tax using the official IRS 2025 brackets. It does not compute your New Mexico state tax -- see the New Mexico rate schedule below to work that out.
Where can I find official New Mexico tax forms?
Official forms, instructions, and filing guidance are available at the New Mexico Taxation and Revenue Department.
What is the sales tax rate in New Mexico?
New Mexico's combined state and average local sales tax rate is 7.82%. This is separate from income tax and applies to most retail purchases -- use our sales tax calculator to check a specific purchase.
When are New Mexico 2025 state taxes due?
2025 taxes are generally filed in 2026. The New Mexico filing deadline is April 15, 2026, the same as the federal deadline.
Understanding Your New Mexico Tax Estimate
Your results combine two separate bills: federal tax owed to the IRS, and New Mexico state tax owed to the New Mexico Taxation and Revenue Department. The state return is filed separately from your federal Form 1040, with a state filing deadline of April 15. For the mechanics of how bracket math actually works -- why your effective rate is almost always lower than your top bracket -- see our marginal vs. effective tax rate guide.
Lowering Your New Mexico Bill
Pre-tax retirement contributions reduce your federal and New Mexico taxable income in the same move -- see our 401(k) contribution limits and HSA limits guides for the current caps. Beyond that, New Mexico-specific credits and deductions that don't exist at the federal level are listed at the New Mexico Taxation and Revenue Department -- worth checking, since these are easy to miss if you only look at federal guidance.
Combined Sales + Income Tax Picture
New Mexico's combined state-plus-average-local sales tax rate is 7.82%. If you're self-employed, that's an added layer on top of income tax -- our self-employment tax calculator covers the SE-specific piece separately.
Disclaimer: Estimates for educational purposes only. State tax results are approximations based on published bracket data and do not account for all deductions, credits, exemptions, local taxes, or individual situations. Not tax, legal, or financial advice. Consult the New Mexico Taxation and Revenue Department or a qualified tax professional for guidance specific to your situation.