New Mexico has a progressive income tax system, with five brackets that are each dependent on income level and filing status. The tax rates, which vary from 1.70% to 5.90%, are ranked in the bottom 20 on a nationwide scale. No New Mexico cities levy local income taxes.
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New Mexico Paycheck Quick Facts
When you get a new job in New Mexico, you will have to fill out a W-4 form. This is the form that your employer will use to figure out how much money to withhold from your paychecks for federal income taxes. That money goes to the IRS, which counts it toward your annual income taxes. There are a number of factors that affect how much you pay in federal income taxes, including your salary, marital status and number of dependents.
The IRS recently made major revisions to the Form W-4. It removed the option to claim allowances, as well as the option to claim personal or dependency exemptions. The new form also uses a five-step process that allows filers to declare additional income, and it requires you to enter annual dollar amounts for things such as total annual taxable wages, non-wage income as well as itemized and other deductions.
Your employer also withholds FICA taxes from your paychecks. Medicare and Social Security taxes together make up FICA taxes. Medicare tax is 1.45% of your wages and Social Security tax is 6.2% of your wages. Your employer will match that amount so your total contribution is double what you actually pay. If you earn over $200,000 as a single filer, head of household or qualifying widow(er), wages in excess of that amount are subject to a 0.9% Medicare surtax, which employers do not match. Married couples filing separately pay this tax on income over $125,000 and married couples filing jointly pay in on income over $250,000.
Also consider that your paycheck size depends on how often you get paid. If you get paid biweekly, your checks will be more frequent and smaller than if you get paid once a month.
| Year | Median Household Income |
|---|---|
| 2022 | $58,722 |
| 2021 | $53,463 |
| 2020 | $50,906 |
| 2019 | $53,113 |
| 2018 | $48,283 |
| 2017 | $45,601 |
| 2016 | $48,451 |
| 2015 | $45,119 |
| 2014 | $46,686 |
| 2013 | $40,166 |
| 2012 | $43,424 |
New Mexico has fairly low income tax rates. The state has a progressive tax system with five brackets that are determined by income level and filing status. Single individuals in the Land of Enchantment pay 1.70% on the first $5,500 of their taxable income; 3.20% on income up to $11,000; 4.70% on income up to $16,000; 4.90% on income up to $210,000; and 5.90% on income over $210,000. The tax rates remain the same for those with other filing statuses, but the income levels shift.
No cities in New Mexico charge local income taxes, so you don’t have to worry about that.
If you are planning a move to New Mexico or if you are interested in refinancing a property in the state, take a look at our New Mexico mortgage guide. The guide details important information about rates and the different kinds of loans you’ll be considering when getting a mortgage in the state.
| Single Filers | |
| New Mexico Taxable Income | Rate |
|---|---|
| $0 - $5,500 | 1.70% |
| $5,500 - $11,000 | 3.20% |
| $11,000 - $16,000 | 4.70% |
| $16,000 - $210,000 | 4.90% |
| $210,000+ | 5.90% |
