How New Mexico taxes wages
Six brackets from 1.5% to 5.9%, restructured in 2025. Uses the federal standard deduction.
At $65,000 of wages, that is the 10th-lowest estimated bill of the 42 jurisdictions (including DC) that tax wages.
Its top rate of 5.9% is the 15th-highest among the 26 jurisdictions with progressive brackets.
Rates range from 1.5% to 5.9%. We don’t list the full bracket schedule here yet; for exact thresholds, see the official New Mexico tax agency website.
Example: $65,000 salary, single filer
| Wages | $65,000 |
|---|---|
| Income not taxed (approx. deduction, exemptions, 0% bracket) | −$16,100 |
| Income taxed | $48,900 |
| Average rate used for the estimate | × 3.9% |
| Estimated New Mexico income tax | $1,907 |
That works out to about $159 a month, or an effective rate of 2.93% of wages.
Calculators for New Mexico
- Paycheck calculator
Take-home pay after federal income tax, Social Security, Medicare, and New Mexico income tax, with New Mexico selected.
- Tips and overtime calculator
Your federal deduction for qualified tips and overtime, with New Mexico selected and its state rules applied to the New Mexico estimate.
- Senior deduction calculator
A federal deduction of up to $6,000 for each person 65 or older, after the income phase-out.
- Car loan interest calculator
A federal deduction for interest on a loan for a new, U.S.-assembled vehicle.
Does New Mexico tax tips and overtime?
New Mexico does not follow the federal tips and overtime deduction. The state’s analysis of HB 264 says New Mexico doesn’t conform, and the 2026 tax package (SB 151) adds neither deduction.
Qualified tips and overtime you deduct on your federal return (Schedule 1-A) are still taxed by New Mexico, and our estimate taxes your full wages.
Source: New Mexico Legislature: agency analysis of HB 264 (PDF), February 13, 2026; Office of the Governor: tax package signed, March 11, 2026. Checked . See how every state treats tips and overtime
To see your federal deduction and New Mexico tax together, open the tips and overtime calculator with New Mexico selected.
New Mexico vs. neighboring states
Workers in Texas and Arizona would owe less on the same salary. Colorado and Oklahoma would charge more.
| State | Est. tax on $65,000 | vs. New Mexico |
|---|---|---|
| Texas | $0 | −$1,907 |
| Arizona | $1,223 | −$685 |
| Colorado | $2,152 | +$245 |
| Oklahoma | $2,364 | +$457 |
Official source
For forms, exact brackets, and filing deadlines, go to the official New Mexico tax agency website.