New Mexico Income Tax Calculator 2026

How New Mexico income tax is calculated

New Mexico starts with your federal adjusted gross income, then applies the federal standard deduction or itemized deductions you claimed, New Mexico exemptions and deductions, and its six-bracket rate schedule. You must use the same filing status as on your federal return, and the return is Form PIT-1.

The brackets have been in place since tax year 2025 under HB 252. Single filers pay 1.5% on the first $5,500 of taxable income, rising to 5.9% above $210,000. Joint filers and heads of household share wider brackets, with the top rate starting at $315,000.

Worked example: $70,000 single filer

A single filer with $70,000 of wages subtracts the $16,100 federal standard deduction, leaving $53,900 of New Mexico taxable income:

• New Mexico tax: $2,124, an effective rate of 3.03% of wages.
• This filer is too far above the AGI limit ($36,667 single) for the low- and middle-income exemption.

New Mexico deductions and exemptions

Beyond the standard deduction, the PIT-1 offers several subtractions. The most common:

• Low- and middle-income exemption: up to $2,500 per exemption for single filers with AGI up to $36,667 and joint filers up to $55,000.
• Age 65+ or blind deduction: available when AGI is no more than $28,500 (single), $51,000 (joint or head of household) or $25,500 (married filing separately).
• Medical care expense deduction for taxpayers 65 or older with $28,000 or more of unreimbursed medical expenses.
• Capital gains deduction: up to $2,500, or 40% of up to $1,000,000 of net capital gain from the sale of a New Mexico business.
• Contributions to a New Mexico-approved Section 529 education savings plan.
• Armed forces active-duty wages.

Social Security and retirement income

Social Security benefits are exempt from New Mexico tax for single filers with AGI up to $100,000 and joint filers up to $150,000. Above those limits, the federally taxable part of your benefits is taxed at New Mexico rates. Pensions, 401(k) and IRA distributions are taxable; if you move to New Mexico, retirement income earned in another state becomes taxable here once you are a resident.

Credits, deadlines and filing tips

New Mexico’s refundable credits are generous for working families. The Working Families Tax Credit equals 25% of the federal earned income credit, and New Mexico extends it to some filers who do not qualify federally — for example, taxpayers age 18 to 24 or those filing with an ITIN — under its state expansion. There is also a Child Income Tax Credit and a refundable medical care credit for people 65 or older.

• Both paper and electronic PIT-1 returns are due April 15 (the next business day if it falls on a weekend or holiday).
• Residents can claim a credit for tax paid to another state on the same income, but must attach a complete copy of the other state’s return.
• Part-year residents and nonresidents allocate income on Schedule PIT-B.