New Mexico income tax rates and brackets for 2025 and 2026

House Bill 252 of 2024 replaced New Mexico’s five brackets (1.7% to 5.9%) with six, from 1.5% to 5.9%, for tax years starting in 2025 (NMSA 7-2-7). The bracket amounts are fixed in the law, and the 2026 session did not change them. Heads of household and surviving spouses use the joint brackets.

Form PIT-1 starts from federal adjusted gross income and takes off the same standard or itemized deduction you used on your federal return; itemizers add back state and local income taxes. New Mexico has no personal exemption amount, but joint filers and heads of household can deduct $4,000 for each dependent after the first. A low- and middle-income exemption of up to $2,500 per person applies if federal AGI is no more than $36,667 (single), $55,000 (joint or head of household) or $27,500 (married filing separately).

The capital gains deduction changed for 2025. It is now the greater of up to $2,500 of net capital gains, or 40% of up to $1 million of gain from selling a business. Before 2025 any taxpayer could take 40% of all net capital gains, so most investors with large gains now get a much smaller deduction. Short-term gains do not count.

For example, a single filer with $60,000 of wages has $44,250 of New Mexico taxable income for 2025 after the $15,750 federal standard deduction, and owes about $1,671. For 2026, with the $16,100 federal standard deduction, the tax is about $1,654.

New Mexico follows federal changes to adjusted gross income automatically, and it uses the federal standard deduction, so the higher federal standard deduction from the July 2025 law (Public Law 119-21) does carry over. The new federal deductions for tips, overtime and seniors 65 or older are taken after AGI, and the Taxation and Revenue Department told legislators that New Mexico does not follow them. The 2025 New Mexico forms also have no line for the federal car loan interest deduction, although the same presentation suggested it might carry over; watch the 2026 instructions.

New Mexico exempts the Social Security included in your federal AGI if that AGI is no more than $100,000 (single), $150,000 (joint, head of household or surviving spouse) or $75,000 (married filing separately). It is a cliff, not a phase-out: one dollar over the limit and none of it is exempt.

Pensions, annuities and IRA distributions are taxed; there is no general pension exclusion. Armed forces retirees, and from 2025 their surviving spouses, can exempt up to $30,000 of military retirement pay, and active-duty pay is fully exempt. Taxpayers 65 or older or blind can claim an exemption of up to $8,000, but only with AGI up to $51,000 (joint) or $28,500 (single).

Most of these are claimed on Form PIT-RC and are refundable, so you receive any amount above your tax.

You file if you are a New Mexico resident or have New Mexico income and are required to file a federal return. Nonresidents file with income from any New Mexico source; there is no minimum amount. You must use the same filing status as on your federal return. The main forms are PIT-1, PIT-ADJ for adjustments, PIT-B for allocating income for part-year residents and nonresidents, and PIT-RC for rebates and refundable credits. E-filing through the Department’s Taxpayer Access Point is free.

Paper and e-filed returns are both due April 15; the old April 30 e-file deadline was repealed in 2025. So 2026 returns are due April 15, 2027. New Mexico accepts the federal extension (or Form RPD-41096) to October 15, but interest on unpaid tax still runs from April 15.

Check a New Mexico refund with “Where’s My Refund?” on the Taxpayer Access Point (tap.state.nm.us), under personal income. You need your Social Security number or ITIN and the refund amount, and you do not need to register. You can also call (866) 285-2996 and choose the self-serve option.

The Department’s refund page says e-filed returns claiming a refund are generally processed in 6 to 8 weeks and paper returns in 8 to 12 weeks; the PIT-1 instructions and refund FAQ allow up to 12 weeks. After the refund is issued, direct deposit can take up to 7 business days and a paper check 2 to 3 weeks.

You are a New Mexico resident if New Mexico is your domicile, or if you are physically present in the state 185 days or more in the year, counting only full 24-hour days. Military members do not become residents just by being stationed here. First-year residents, part-year residents and nonresidents all use Schedule PIT-B, which taxes the New Mexico share of income.

We found no reciprocal agreement in New Mexico’s guidance. Residents who work in another state report all income and claim the credit for tax paid to that state; nonresidents pay New Mexico tax on wages earned in New Mexico, including Texas and Arizona commuters.