The state of New Mexico collects income taxes on April 15th, much the way the IRS and 44 other states do.
• Lists basic New Mexico state tax information
• Links to the major New Mexico income tax forms
• Shows you how you can save time and money by e-filing
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Tax Rate Range: Low - 1.7%; High - 5.3% Income Brackets*: Lowest - $5,500; Highest - $16,00 Number of Brackets: 4 Personal Exemptions: Single - $3,300; Married - $6,600; Dependents - $3,300 Standard Deduction: Federal Amount Medical/Dental Deduction: Credit of 3% of unreimbursed prescription drug expenses to maximum of $150 per individual or $300 per return Federal Income Tax Deduction: None
Note:*The tax brackets reported are for single individuals. For married couples filing jointly, the same rates apply for income under $8,000 and over $100,000.
Filing your New Mexico state income tax return
In New Mexico, the filing status on your state return must to be the same as the filing status on your federal income tax return.
Similarly, you must maintain the same method of taking deductions from one return to the other. For instance, if you itemize your deductions on your federal return, you must also itemize on your state return.
New Mexico offers quite a few income tax credits to its taxpayers. A full list is available in the state income tax instruction booklet. The following is a list of the more common tax credits you may be eligible to claim.
• welfare to work program credit • rural job tax credit • taxes paid to another state
New Mexico allows a variety of tax deductions as well. Again, a full list is available in the tax instruction booklet, but a short list of common deductions can be found below.
• msa saving account • contributions to education trust board account • exemption for adopted or special needs children
Also, New Mexico offers a low-income tax rebate for those who meet specific requirements, among them that the taxpayer has a modified adjusted gross income of $22,000 or less.
Further tax relief is given to taxpayers older than 65 in the form of a tax deduction of $8,000 or low-income taxpayers in the form of a property tax rebate.
Since retirement income follows the recipient to the state of residency, any retirement benefits you receive, regardless of whether the source is outside of New Mexico is taxable to New Mexico if you are a resident.
In New Mexico, there are no special tax rates for capital gains. Since the New Mexico tax return is based on the adjusted gross income on the federal return, which already includes taxable capital gains, they are, by default, taxed at the same rate as the rest of your income.
However, there is a deduction of up to $1,000 on net capital gains. This is taken in PIT-ADJ Schedule.
Finally, remember that as a wage earner in New Mexico, you are required to file a state income tax return. This rule holds true for nonresidents as well as residents.