New Mexico State Income Tax Withholding
Last Updated: January 2026
Overview
New Mexico imposes a progressive state income tax with six brackets, ranging from 1.5% to 5.9%. A new electronic filing mandate takes effect January 1, 2026, requiring most employers to file and pay electronically.
2026 Tax Rates
Single Filers
| Taxable Income | Rate |
|---|---|
| $0 - $5,500 | 1.5% |
| $5,501 - $11,000 | 3.2% |
| $11,001 - $16,000 | 4.7% |
| $16,001 - $210,000 | 4.9% |
| $210,001 - $315,000 | 5.3% |
| Over $315,000 | 5.9% |
Married Filing Jointly
| Taxable Income | Rate |
|---|---|
| $0 - $8,000 | 1.5% |
| $8,001 - $16,000 | 3.2% |
| $16,001 - $24,000 | 4.7% |
| $24,001 - $315,000 | 4.9% |
| $315,001 - $420,000 | 5.3% |
| Over $420,000 | 5.9% |
Deductions and Exemptions
Standard Deduction:
- Single: $14,600
- Married Filing Jointly: $29,200
- Head of Household: $21,900
Personal Exemption: $4,350 per person (subject to income limitations)
Special Considerations
State W-4 Form
New Mexico accepts the federal Form W-4 for withholding purposes. Employees may use New Mexico Form RPD-41359 to claim different allowances or additional withholding for state purposes.
Electronic Filing Mandate (NEW for 2026)
Effective January 1, 2026: New Mexico requires electronic filing and payment for most employers.
Who must file electronically:
- All employers with 25 or more employees
- Employers with annual withholding of $25,000 or more
Electronic options:
- New Mexico Taxpayer Access Point (TAP)
- Approved third-party payroll providers
- EFT payment
Withholding Tables
New Mexico Taxation and Revenue Department publishes annual withholding tables. The FYI-104 publication contains percentage method formulas and wage bracket tables.
No Local Income Taxes
New Mexico does not permit local income taxes. Only state withholding is required.
Gross Receipts Tax
New Mexico imposes a Gross Receipts Tax (GRT) on businesses, but this is not a payroll withholding tax. It functions similarly to a sales tax and is not withheld from employee wages.
Reciprocal Agreements
New Mexico has no reciprocal agreements with other states. All wages earned in New Mexico are subject to withholding regardless of the employee's state of residence.