Results are estimates for educational purposes only. Based on 2026 IRS federal brackets and New Mexico state tax rates. Always consult a qualified tax professional.
New Mexico income tax overview
New Mexico uses a progressive income tax system with a top rate of 5.9%, applied across multiple brackets that scale with income. The state offers a notable Social Security exemption for lower and middle-income retirees, and provides a low- and middle-income tax exemption that reduces the effective burden for many residents. New Mexico's economy benefits significantly from oil and gas severance taxes, which helps keep the income tax burden moderate relative to some neighboring states. Albuquerque and Santa Fe have growing tech and film production sectors that have benefited from state tax incentives. New Mexico does not allow cities or counties to levy a separate local income tax, though gross receipts taxes (similar to sales tax) vary significantly by municipality.
2026 New Mexico income tax rates
Tax rate
Income range (single filer)
1.5%
$0 – $5,500
3.2%
$5,501 – $11,000
4.7%
$11,001 – $16,000
4.9%
$16,001 – $210,000
5.9%
Over $210,000
Worked example: $75,000 salary in New Mexico
A $75,000 salary in New Mexico results in approximately $3,075 in state income tax (effective ~4.1%), plus $12,580 federal tax, $4,650 Social Security, and $1,088 Medicare. Annual take-home is approximately $53,607, or $2,062 bi-weekly.
Key facts: 5.9% top rate (applies above $210,000) · Social Security exemption for low/middle income · No local income tax
Frequently asked questions — New Mexico income tax
New Mexico exempts Social Security benefits for taxpayers with income below certain thresholds ($100,000 single, $150,000 married). Above those thresholds, Social Security becomes partially taxable.
New Mexico's top 5.9% rate only applies to income over $210,000, meaning the vast majority of residents pay well below the top marginal rate — most middle-income earners pay an effective rate closer to 4-4.5%.
No. New Mexico cities and counties do not levy local income taxes, though gross receipts tax rates (similar to sales tax) vary by municipality and can be significant.
New Mexico generally conforms to the federal standard deduction amounts, giving single filers the full $15,000 deduction in 2026.
New Mexico's substantial oil and gas severance tax revenue helps fund state government, which has allowed the state to keep income tax rates relatively moderate compared to states without significant natural resource revenue.
Compare New Mexico to other states
Use our US income tax calculator to compare your take-home pay across all 50 states. You may be surprised how much location affects your net income.