Basic Info
Deductions
Insurance Premiums
Your New Mexico Paycheck Results
Calculating your paycheck…
Take-Home Pay:
$0.00
Per Pay Period:
$0.00
Tax Breakdown
Federal Income Tax:
$0.00
State Income Tax (NM):
$0.00
Social Security:
$0.00
Medicare:
$0.00
Additional Medicare:
$0.00
Total Tax:
$0.00
Deduction Breakdown
401(k) Contribution:
$0.00
Traditional IRA:
$0.00
HSA Contribution:
$0.00
FSA Contribution:
$0.00
Health Insurance:
$0.00
Dental Insurance:
$0.00
Vision Insurance:
$0.00
Other Deductions:
$0.00
Total Deductions:
$0.00
Gross Annual Income:
$0.00
Effective Tax Rate:
0.00%
New Mexico State Income Tax Information
New Mexico employs a progressive income tax system with rates ranging from 1.7% to 5.9% for the 2025 tax year. The tax brackets are structured to accommodate various income levels, ensuring a fair taxation approach for residents.
Tax Brackets for 2025
| Taxable Income | Tax Rate |
|---|---|
| Up to $5,500 | 1.7% |
| $5,501 – $11,000 | 3.2% |
| $11,001 – $16,000 | 4.7% |
| $16,001 – $210,000 | 4.9% |
| Over $210,000 | 5.9% |
Standard Deduction
New Mexico aligns its standard deduction with the federal amounts for the 2025 tax year:
- Single or Married Filing Separately: $15,000
- Married Filing Jointly: $30,000
- Head of Household: $22,500
Retirement Income
New Mexico offers several tax benefits for retirees:
- Social Security Benefits: Exempt for single filers with income under $100,000 and joint filers under $150,000.
- Other Retirement Income: Individuals aged 65 or older can exempt up to $8,000 (single filers) or $16,000 (joint filers) of retirement income, including pensions and IRA distributions.
- Medical Expense Deduction: Seniors may deduct up to $3,000 for unreimbursed medical expenses exceeding $28,000.
FICA Taxes
| Tax Component | Rate | Income Limit |
|---|---|---|
| Social Security | 6.2% | Up to $176,100 |
| Medicare | 1.45% | No Limit |
| Additional Medicare | 0.9% | Income above $200,000 (Single) / $250,000 (Married) |
Pre-Tax Deductions
Common pre-tax deductions available to New Mexico residents include:
- Contributions to 401(k), 403(b), and other retirement plans
- Health and dental insurance premiums
- Health Savings Account (HSA) and Flexible Spending Account (FSA) contributions
- Pre-tax transit and commuter benefits
New Mexico-Specific Tax Credits and Deductions
| Credit or Deduction | Description |
|---|---|
| Earned Income Tax Credit (EITC) | Provides a credit equal to 25% of the federal EITC for eligible low- to moderate-income workers. |
| Low-Income Comprehensive Tax Rebate | Offers a rebate to qualifying low-income residents based on income and family size. |
| Solar Market Development Tax Credit | Allows a credit for a percentage of the cost of solar photovoltaic or solar thermal systems installed on residential properties. |
| Advanced Energy Equipment Tax Credit | Provides a credit of up to 20% for equipment used in producing components for solar, wind, battery manufacturing, and rare earth elements. |
Interesting Facts About New Mexico Taxes
- New Mexico’s progressive tax system ensures that higher earners contribute a larger percentage of their income.
- The state offers various incentives to promote renewable energy adoption among residents.
- Recent tax reforms have aimed to reduce the tax burden on low- and middle-income families.
Frequently Asked Questions (FAQs)
- Does New Mexico tax Social Security benefits?
- Social Security benefits are exempt for single filers with income under $100,000 and joint filers under $150,000.
- Are there any tax credits for renewable energy installations?
- Yes, residents can claim credits for installing solar energy systems and for purchasing advanced energy equipment.
- What is the standard deduction in New Mexico?
- New Mexico follows the federal standard deduction amounts: $15,000 for single filers, $30,000 for married filing jointly, and $22,500 for head of household.
- Are there any tax benefits for seniors?
- Yes, seniors may qualify for exemptions on retirement income and deductions for unreimbursed medical expenses.