New Mexico — Personal Income Tax

Direct answer (updated): For tax years 2025 and earlier, every individual who both (a) is a New Mexico resident or has income from New Mexico sources and (b) is required to file a federal income tax return must file New Mexico Form PIT‑1. Starting in tax year 2026, New Mexico law reduces the personal income tax rate to zero and makes filing optional, not mandatory, although the PIT‑1 may still be filed voluntarily.

Why:

• For tax years through 2025, New Mexico enforces a mandatory filing rule: individuals meeting both the residency/source and federal requirement thresholds must file.
• House Bill 275 (2025) amends NMSA 1978 § 7‑2‑12 to set the personal income tax rate at zero percent beginning in tax year 2026 and shifts the filing requirement from mandatory to optional—taxpayers “may” file rather than “shall” file.

Source support:

• Authority source for the pre-2026 rule: NM Taxation & Revenue Department FAQ and PIT‑1 instructions (https://www.tax.newmexico.gov/individuals/personal-income-tax-information-overview/)
• Authority source for 2026 changes: HB 275, 2025 Regular Session (nmlegis.gov)

Caution / review status: Not yet human confirmed.

Effective for taxable years beginning January 1, 2025, New Mexico restructured its personal income tax rates under NMSA 1978, § 7-2-7 (as amended by Laws 2024, ch. 67, § 5), expanding the brackets from five to six for each filing status and reducing the lowest rate from 1.7% to 1.5%.

The statutory marginal rates for taxable years beginning on or after January 1, 2025, are as follows:

Married filing jointly, head of household, and surviving spouse:

• Not over $8,000: 1.5%
• Over $8,000 to $25,000: $120 plus 3.2% of the excess over $8,000
• Over $25,000 to $50,000: $664 plus 4.3% of the excess over $25,000
• Over $50,000 to $100,000: $1,739 plus 4.7% of the excess over $50,000
• Over $100,000 to $315,000: $4,089 plus 4.9% of the excess over $100,000
• Over $315,000: $14,624 plus 5.9% of the excess over $315,000

Single filers, estates, and trusts:

• Not over $5,500: 1.5%
• Over $5,500 to $16,500: $82.50 plus 3.2% of the excess over $5,500
• Over $16,500 to $33,500: $434.50 plus 4.3% of the excess over $16,500
• Over $33,500 to $66,500: $1,165.50 plus 4.7% of the excess over $33,500
• Over $66,500 to $210,000: $2,716.50 plus 4.9% of the excess over $66,500
• Over $210,000: $9,748 plus 5.9% of the excess over $210,000

Married filing separately:

• Not over $4,000: 1.5%
• Over $4,000 to $12,500: $60 plus 3.2% of the excess over $4,000
• Over $12,500 to $25,000: $332 plus 4.3% of the excess over $12,500
• Over $25,000 to $50,000: $869.50 plus 4.7% of the excess over $25,000
• Over $50,000 to $157,500: $2,044.50 plus 4.9% of the excess over $50,000
• Over $157,500: $7,312 plus 5.9% of the excess over $157,500

These brackets replace the prior five-bracket schedule and reflect statutory changes enacted in the 2024 legislative session. Practitioners should refer to NMSA 1978, § 7-2-7 as amended for the precise statutory language. For exact details and examples of tax calculation, consult the statutory text.

Source: NMSA 1978 § 7-2-7, as amended by Laws 2024, ch. 67, § 5

Not yet human confirmed.

For tax year 2025 (returns due in 2026), New Mexico personal income tax returns (Form PIT-1) must be filed by the same deadline as the taxpayer’s federal individual income tax return—typically April 15—regardless of whether the return is filed electronically or on paper. Extensions granted by the IRS for federal returns also automatically extend the New Mexico deadline to file. However, an extension of time to file does not extend the deadline to pay taxes due—payments must also be made by the standard due date to avoid interest and penalties.

Key change for returns due in 2026 and later: Effective for tax years beginning on or after January 1, 2025 (generally impacting returns due April 2026), the New Mexico Legislature amended NMSA 1978, § 7-2-12 (Laws 2023, ch. 73, § 40) to eliminate the prior April 30 extended deadline for tax returns filed electronically. All return and payment due dates are now aligned with the federal deadline, and no separate later deadline is provided for electronically filed returns.

Prior to this amendment, e-filed returns were accepted until April 30, but this is no longer the case.

Source: NMSA 1978 § 7-2-12, as amended Source: New Mexico PIT-1 Instructions 2025

Not yet human confirmed. The above reflects legislative updates through the 2025 tax year.

New Mexico personal income tax begins with the taxpayer's federal adjusted gross income (FAGI) as reported on the federal income tax return. The state uses FAGI as the starting point, then allows taxpayers to make New Mexico-specific adjustments for exemptions, deductions, and income exclusions on Form PIT-1 to arrive at New Mexico taxable income.

Source: New Mexico Taxation and Revenue Department, Personal Income Tax Information

New Mexico imposes a graduated personal income tax under § 7-2-7 NMSA 1978, as amended by House Bill 252 in the 2024 legislative session. The current rate structure took effect for taxable years beginning on or after January 1, 2025, replacing the bracket framework that had been in place since 2005.

The top marginal rate is 5.9 percent. The threshold at which this top rate applies varies by filing status:

• Married filing jointly, heads of household, and surviving spouses: The 5.9% rate applies to taxable income over $315,000. Tax on income at that threshold is $14,624 plus 5.9% of the excess over $315,000.

• Single filers and estates and trusts: The 5.9% rate applies to taxable income over $210,000. Tax on income at that threshold is $9,748 plus 5.9% of the excess over $210,000.

• Married filing separately: The 5.9% rate applies to taxable income over $157,500. Tax on income at that threshold is $7,312 plus 5.9% of the excess over $157,500.

The statute establishes multiple graduated brackets below the top rate, applying progressively lower rates to lower tiers of income. The complete bracket table for each filing status is set forth in § 7-2-7 NMSA 1978 subsections A (joint/HOH/surviving spouse), B (single/estates/trusts), and C (married filing separately). Practitioners should consult the full statutory text for the specific thresholds and rates that apply to income below the top bracket, as the marginal-rate structure means that only the portion of income within each bracket is taxed at that bracket's rate.

The 2024 restructuring was the first major revision to New Mexico's individual income tax brackets in nearly two decades and generally reduced effective tax liability for filers at most income levels when compared to the prior framework.

Source: HB 252, 2024 N.M. Legislative Session (Laws 2024, ch. 67, § 5)

New Mexico law establishes two alternative bases for individual income tax residency: (1) domicile in New Mexico at any time during the taxable year, or (2) physical presence in New Mexico for at least 185 days during the taxable year. The statute is explicit that these are independent tests — satisfying either makes the individual a New Mexico tax resident for the period in question. The law does not require both tests to be met; the "or" in the statutory language is disjunctive, not cumulative.

Statutory authority — § 7-2-2 NMSA 1978: Under NMSA 1978, § 7-2-2(S): > "Resident" means an individual who is domiciled in this state during any part of the taxable year or an individual who is physically present in this state for one hundred eighty-five days or more during the taxable year, regardless of where the individual's domicile is located."

Effect for taxpayers:

• An individual who is domiciled in New Mexico — i.e., who has New Mexico as their permanent legal home — is a resident, even if they spend fewer than 185 days in the state during the year.
• Conversely, a non-domiciliary who spends 185 or more days in the state is a resident for tax purposes for that year.
• Either path triggers New Mexico's worldwide-income taxation of the individual for the relevant portion of the year, barring specific statutory carve-outs.

Interaction with Department guidance: Statutory authority, not informal DOR publications, controls the residency definition. The Taxation and Revenue Department's guidance generally tracks the statute and recognizes both the domicile and 185-day presence tests as independent routes to resident status.

Source: NMSA 1978 § 7-2-2(S)

Not yet human confirmed.

New Mexico imposes personal income tax on nonresidents to the extent of their net income derived from New Mexico sources. The statutory requirement is set out in NMSA 1978, § 7-2-3(A), which provides that income tax is imposed on “the net income of every nonresident derived from property, employment or any business carried on in, into or from this state.”

Types of New Mexico source income for nonresidents: NMSA 1978, § 7-2-11 details what is considered New Mexico source income for nonresidents. Main categories include:

• Compensation for services performed in New Mexico. Nonresidents are taxed only on the portion of wages or salaries actually earned through work performed physically in the state.

• Income from business activities in New Mexico. Income derived from operating a business, trade, or profession carried on in, into, or from New Mexico is New Mexico source.

• Income from property located in New Mexico. This includes rents, royalties, and gains from the sale of tangible property situated in the state.

• Income from intangible property is New Mexico source only if it is attributable to business or employment carried on in, into or from New Mexico.

• Distributive shares from partnerships or S corporations doing business in New Mexico. Nonresidents are taxed on their share of the entity's income derived from New Mexico sources.

• Prizes, gambling winnings, and lottery income from New Mexico events.

Specific examples or methods of determining New Mexico source income may be further outlined in regulations, such as NMAC 3.3.1.10.

"Employed or engaged in business in, into or from this state": While § 7-2-3 does not define this phrase in detail, NMAC 3.3.1.7(F) clarifies “carrying on business” to include owning or operating a business, engaging in transactions for profit, or acting as a fiduciary with regard to business property or activity in New Mexico. Physical presence in the state is not strictly required—conducting business with New Mexico customers from out-of-state may still constitute "carrying on business" if it results in New Mexico source income as described above.

The statutes and regulations do not provide comprehensive guidance on every scenario (e.g., remote work for a New Mexico employer performed entirely out-of-state is not specifically addressed), so each case must be carefully compared to the categories above.

Source: NMSA 1978 § 7-2-3 Source: NMSA 1978 § 7-2-11 Source: NMAC 3.3.1.7(F) and 3.3.1.10

New Mexico personal income tax begins with federal adjusted gross income (AGI) and requires specific statutory additions to, and subtractions from, federal AGI to determine New Mexico taxable income. The relevant adjustments, exemptions, deductions, and exclusions are set out primarily in NMSA 1978 §§ 7-2-2, 7-2-5, 7-2-5.2, 7-2-5.6, and are implemented annually via the PIT-1 Instructions.

Key additions to federal AGI (included in New Mexico base income):

• Interest from non-New Mexico state/municipal bonds: Taxpayers must add interest and dividends from bonds of states other than New Mexico (NMSA § 7-2-2(A), PIT-1 Instructions, line 2).
• Federal net operating loss (NOL) deduction: If deducted for federal purposes but disallowed for NM, must be added back (NMSA § 7-2-2(H), PIT-1 Instructions, line 3).

Key subtractions, exemptions, and deductions allowed by New Mexico:

• U.S. government bond interest: Income from direct U.S. obligations may be subtracted if included in federal AGI (NMSA § 7-2-5(A)).
• Social Security benefits: Fully excluded from New Mexico income for tax years beginning on or after January 1, 2025 (PIT-1 Instructions 2025, line 10; NMSA § 7-2-5(A)(5)).
• Railroad Retirement benefits: Excluded under federal law and treated as such for New Mexico (PIT-1 Instructions, line 8).
• Centenarian exemption: Up to $2,800 if age 100 or over at year-end and not a dependent (NMSA § 7-2-5.3, PIT-1 Instructions, line 15).
• Medical care expense deduction: Deductible if unreimbursed medical expenses exceed the federal threshold; amount is the excess over 7.5% of federal AGI, times the applicable percentage (NMSA § 7-2-5.6, PIT-1, line 16).
• Low- and middle-income exemption: For AGI under $36,000 (single) or $51,000 (joint/head of household), exemptions of $4,000 per taxpayer and $4,000 per dependent, phased out at higher AGIs (NMSA § 7-2-5.2; PIT-1 Instructions, worksheet p.11).
• Active duty military pay: Exclusion applies to New Mexico residents on active duty stationed out-of-state, up to $50,000 per taxpayer (NMSA § 7-2-5.11).
• Tribal member income exclusion: Wages and self-employment income earned by enrolled members on their own tribal land (NMSA § 7-2-5.5).
• Conservation easement and land donation deduction: For qualified charitable donations; see NMSA § 7-2-18.10 and PIT-1 Instructions, line 18.

Statutory caps and phase-outs:

• The low/middle-income exemption phases out as AGI increases above the thresholds cited above; see annual PIT-1 worksheet for precise amounts each year.
• Centenarian and military exclusions are capped as described in statute/instructions.

This list summarizes core categories used for most individual taxpayers but is not exhaustive. Each permitted modification must be specifically allowed in the statute or annual PIT-1 publication, and limits or definitions may shift periodically.

Source: NMSA 1978 § 7-2-2, § 7-2-5, § 7-2-5.2, § 7-2-5.3, § 7-2-5.5, § 7-2-5.6, § 7-2-5.11, § 7-2-18.10 Source: New Mexico PIT-1 Instructions 2025

Not yet human confirmed.

Direct answer: New Mexico law treats domicile as an independent basis for resident status for personal income tax purposes—either domicile in the state at any time during the taxable year or physical presence for 185 days or more will, separately, confer residency. The statute and regulations are explicit that either path triggers residency and New Mexico personal income tax liability.

Why: The two-pronged definition appears at NMSA 1978, § 7-2-2(S): "Resident" means an individual who is domiciled in this state during any part of the taxable year or an individual who is physically present in this state for one hundred eighty-five days or more during the taxable year, regardless of where the individual's domicile is located. Department regulations at NMAC 3.3.1.9(A)(1)–(2) interpret this in the same disjunctive fashion. "Domicile" is defined as the place where an individual intends to have their permanent home and to which they intend to return whenever absent, regardless of temporary residence elsewhere. Regulation requires both physical presence in New Mexico and intent to remain to establish New Mexico domicile (NMAC 3.3.1.9(C)).

A change of domicile to another state is recognized only if the individual physically leaves New Mexico and intends to establish a permanent home elsewhere. If an individual is domiciled in New Mexico at any time during the year but later moves, they remain a resident for the period up to the change (unless present 185 days or more, in which case they are resident for the full year). The 185-day test is entirely independent—an individual not domiciled in New Mexico may nonetheless become a resident if physically present ≥ 185 days.

Source support:

• Statutory authority: NMSA 1978, § 7-2-2(S).
• Department regulation: NMAC 3.3.1.9(A)–(D) covers both disjunctive test structure and the definition of domicile, including the need for physical presence and intent, as well as how domicile may change.
• Official Department guidance tracks these rules in the PIT-1 Instructions.

Caution / review status: Not yet human confirmed. The sources above are current as of June 2026 and reflect both statute and controlling administrative interpretation.

Source: NMSA 1978 § 7-2-2(S) Source: NMAC 3.3.1.9 Residency—personal income tax Source: 2025 New Mexico Personal Income Tax PIT-1 Instructions

Direct answer: An individual is a part-year resident of New Mexico for personal income tax purposes if the individual is domiciled in New Mexico for only part of the taxable year—either establishing or abandoning domicile during the year—with residency applying for the precise period of New Mexico domicile. The primary test for part-year resident status is a change of domicile within the year, not physical presence for a specific number of days.

Why: New Mexico regulation (N.M. Admin. Code § 3.3.1.9(B)(1)) states a taxpayer is a part-year resident if they are domiciled in New Mexico for part (but not all) of the taxable year. The regulation adds that, in the first year an individual establishes New Mexico domicile, they are a part-year resident from the date domicile is established through the end of the year unless they are physically present in New Mexico for 185 days or more, in which case they become a full-year resident. Conversely, if a domicile is abandoned during the year with the bona fide intent to remain outside New Mexico, residency ends at the time of abandonment—again, unless the 185-day physical presence is met, in which case the individual is considered a resident for the entire year. "Domicile" itself is defined as the true, fixed, and permanent home to which a person intends to return. Regulation specifies that days are determined by consecutive 24-hour periods, and the intent of the individual supported by facts and circumstances is determinative for domicile.

First-year and allocation rules: For the first year a taxpayer becomes a New Mexico resident, only income received on or after the date residency begins is considered resident income (NMSA § 7-2-11(A)(1)), and income earned while nonresident is taxed only if sourced to New Mexico. Allocation in cases of abandoning residency follows the same principle: only the period of actual domicile in New Mexico is subject to New Mexico resident tax.

Form PIT-1 instructions align with this framework: a part-year resident is defined as someone who was a resident for part, but not all, of the year—typically due to a move into or out of the state with appropriate intent and action. The instructions explain that the period of residency begins with established domicile and ends with its abandonment, and reference how to allocate income accordingly (see 2025 PIT-1 Instructions, p. 3: "Who Must File").

Source: N.M. Admin. Code § 3.3.1.9 Source: NMSA 1978 § 7-2-11 Source: 2025 New Mexico Form PIT-1 Instructions, p. 3

Caution / review status: Human confirmed by retired SALT practitioner as of 2026-06-17. This section tracks the language of controlling regulation and Department guidance; no conceptual blending between presence and domicile.

Overview and statutory basis New Mexico’s Low-Income Comprehensive Tax Rebate (LICTR) is a refundable rebate provided under Section 7-2-14 NMSA 1978, originally enacted through House Bill 465 (2006). The rebate is intended to partially offset state and local consumption taxes for low-income New Mexico residents, and is available even to filers with no state tax liability.

Eligibility criteria A taxpayer qualifies for LICTR if:

• They are a resident of New Mexico;
• They are not claimed as a dependent on another taxpayer’s return;
• They meet income and presence requirements as set forth in subsections B and C of Section 7-2-14 NMSA 1978.

Additional limits apply related to dependency status and household filing. The rebate is available to both single and joint filers, but dependents are ineligible to claim it.

Rebate computation and amounts The rebate amount is determined by the taxpayer’s modified gross income and the number of personal exemptions (including spouse and dependents). As reflected in the 2025 New Mexico Tax Expenditure Report, LICTR is available for filers with modified gross income below $36,000, with credits ranging from approximately $15 up to $730 depending on household size and income. The Department’s published table schedules list exact values for each income and household size bracket.

Recent amendments and indexing HB 291 (2021) amended Section 7-2-14 to authorize indexing of the rebate amounts for inflation and confirmed that the rebate may be claimed even if no state tax is otherwise due. This maintains contemporary purchasing power for LICTR recipients.

Claiming the credit LICTR is claimed on the New Mexico Form PIT-1 by attaching Schedule PIT-RC (Rebate and Credit Schedule). For first-year New Mexico residents or part-year filers, the rebate is subject to annualization in line with Section 7-2-2’s residency split rules.

Source: NMSA 1978 § 7-2-14 (LICTR statute) Source: 2025 New Mexico Tax Expenditure Report – LICTR Amounts Source: HB 291 (2021) – Indexing amendment