New Mexico Income Tax Rates and Brackets

Tax Rates

New Mexico Income Tax Rates

New Mexico's six individual income tax rates are 1.5%, 3.2%, 4.3%, 4.7%, 4.9%, and 5.9%. The state publishes one schedule for Married Filing Jointly and Head of Household taxpayers, one for Single taxpayers, and one for Married Filing Separately taxpayers. For easier comparison, the table gives each commonly used filing status its own column even when two statuses use identical thresholds. Each rate applies only to the portion of taxable income within that bracket. Reaching a higher bracket does not cause all of your income to be taxed at the higher rate.

House Bill 252 changed New Mexico's rate schedule beginning with the 2025 tax year. The law expanded the schedule from five to six rates, lowered the first rate from 1.7% to 1.5%, added a 4.3% rate, and revised the taxable-income thresholds. The same statutory schedule remains in effect for 2026, and the bracket thresholds are not adjusted annually for inflation.

Deductions

New Mexico Income Tax Deductions

New Mexico begins its individual income tax calculation with federal adjusted gross income. New Mexico-specific additions increase that amount, while the federal standard or itemized deduction and qualifying state exemptions and deductions reduce it. The result is the taxable income to which the New Mexico tax brackets and rates are applied.

New Mexico deduction and exemption rules do not always match their federal counterparts. The following sections explain the standard deduction, personal and dependent exemptions, itemized deductions, and several retirement-income deductions under current law for 2026.

New Mexico Standard Deduction

New Mexico does not provide a separate state standard-deduction schedule. A taxpayer who claims the federal standard deduction subtracts the same federal amount when calculating New Mexico taxable income. The filing status used on Form PIT-1 must match the status used on the federal return.

New Mexico Personal Exemptions

New Mexico does not provide a general fixed personal exemption for every taxpayer or spouse. A qualifying low- or middle-income taxpayer may instead claim an income-based exemption of up to $2,500 for the taxpayer, spouse, and each dependent counted on Form PIT-1. The amount depends on federal adjusted gross income and filing status. The current income limits are $36,667 for Single taxpayers, $27,500 for Married Filing Separately taxpayers, and $55,000 for joint, Head of Household, and Qualifying Surviving Spouse taxpayers.

New Mexico Dependent Exemptions

A qualifying Married Filing Jointly or Head of Household taxpayer may deduct $4,000 for each qualifying dependent after the first dependent. The deduction is calculated using the Line 13 worksheet in the PIT-1 instructions and entered on Form PIT-1, line 13. A taxpayer who can be claimed as another person's dependent cannot claim this deduction. The deduction remains available while the federal personal exemption amount under Internal Revenue Code Section 151 is zero.

New Mexico Itemized Deductions

A taxpayer who itemizes on the federal return begins with the eligible deductions from federal Schedule A. The federal itemized-deduction total is entered on Form PIT-1, line 12, and box 12a is marked. New Mexico requires an add-back for all or part of the state and local income or sales taxes included in that total. Taxpayers use the Line 10 worksheet in the PIT-1 instructions to calculate the add-back after accounting for the federal SALT limitation and the standard deduction they otherwise could have claimed. The worksheet result is entered on Form PIT-1, line 10, and other state adjustments may also apply.

New Mexico Retirement Income Deductions

New Mexico allows a full subtraction of federally taxable Social Security benefits when federal adjusted gross income does not exceed $100,000 for Single taxpayers, $75,000 for Married Filing Separately taxpayers, or $150,000 for joint, Head of Household, and Qualifying Surviving Spouse taxpayers. A taxpayer age 65 or older may also qualify for an income exemption of up to $8,000, subject to separate income limits. Qualifying armed forces retirement pay may be deducted up to $30,000 per taxpayer. The $30,000 exemption was made permanent for tax years beginning in 2025.

Credits

New Mexico State Tax Credits

New Mexico offers refundable and nonrefundable tax credits that directly reduce state income tax. A refundable credit can produce or increase a refund even when no New Mexico income tax is owed. A nonrefundable credit can reduce tax to zero but cannot by itself create a refund. Eligibility depends on residency, income, filing status, family circumstances, qualifying expenses, and other requirements. Several important New Mexico tax credits and rebates available under current law for 2026 include:

New Mexico Working Families Tax Credit

The refundable New Mexico Working Families Tax Credit (WFTC) is equal to 25% of the federal Earned Income Credit (EIC), also referred to as the Earned Income Tax Credit (EITC). For 2026, the maximum federal EITC is $8,231 for qualifying taxpayers with three or more qualifying children, so the New Mexico WFTC could reach approximately $2,058. Under the NM Expansion, a New Mexico resident who would otherwise qualify may still claim the WFTC despite not meeting certain federal identification-number requirements or, for taxpayers who are at least age 18 but under age 25, the federal age requirement. Taxpayers qualifying under the NM Expansion calculate the federal EIC they otherwise would have received and use that amount as the basis for the state credit. Taxpayers claiming the federal EIC with qualifying children generally complete federal Schedule EIC.

New Mexico Child Income Tax Credit

The refundable New Mexico Child Income Tax Credit is available for each qualifying child and varies according to adjusted gross income. For 2025, the credit ranged from $26 to $637 per qualifying child. The maximum $637 amount applied when adjusted gross income was $25,000 or less, with smaller amounts applying as income increased. The credit amounts are indexed annually, so the final 2026 PIT-RC instructions should be checked for the 2026 table.

New Mexico Low-Income Comprehensive Tax Rebate

The refundable Low-Income Comprehensive Tax Rebate may be available to a qualifying New Mexico resident based on modified gross income and the number of qualifying exemptions. For 2025, the rebate ranged from $17 to $839, with the maximum available to taxpayers reporting six or more exemptions within the applicable income range. Eligibility generally required modified gross income of $36,000 or less and physical presence in New Mexico for at least six months of the year. The final 2026 PIT-RC instructions should be checked for the indexed 2026 rebate table.

New Mexico Child Day Care Credit

The refundable New Mexico Child Day Care Credit may be available to a qualifying resident who paid child-care expenses while gainfully employed. For 2025, the worksheet calculated 40% of qualifying expenses, subject to an $8-per-child daily expense limit, a $480 maximum per child, and a $1,200 maximum per return before subtracting any federal child and dependent care credit. The modified gross income limit was $30,160, and the maximum for a Married Filing Separately taxpayer was $600. Claimants report the credit on Form PIT-RC and submit copies of the Child Day Care Credit Worksheet and Form PIT-CG for each caregiver. The final 2026 instructions should be checked for the applicable income limit and calculation rules.

Credit for Taxes Paid to Another State

A New Mexico resident whose income is taxed by both New Mexico and another state may qualify for a nonrefundable credit. The credit is limited to the smallest of the tax paid to the other state, the New Mexico tax liability, or the New Mexico tax attributable to the income taxed by both states. A taxpayer claiming the credit must complete a separate Line 20 worksheet for each state and include the worksheets and complete copies of the other states' income tax returns with Form PIT-1.

Due Dates

New Mexico State Income Tax Deadline

The deadline to file a 2026 New Mexico individual income tax return and pay any balance due is April 15, 2027. New Mexico recognizes an IRS automatic six-month filing extension through October 15, 2027, so a taxpayer who obtains the federal extension does not need to submit a separate state extension application. An extension does not postpone the April payment deadline, and interest accrues on unpaid tax after the original due date.

If you missed a previous New Mexico filing deadline, do not assume it is too late. You may still be able to file a 2025, 2024, or 2023 return and claim any refund due. New Mexico generally requires a refund to be claimed within three years from the end of the calendar year in which the tax was due. Visit our New Mexico state tax forms page to find Form PIT-1, instructions, and other forms for current and prior tax years.