If you are preparing to file a New Mexico income tax return, you'll want to know what forms you need, where and how to file them and how much you can expect to be taxed. New Mexico has a progressive income tax structure, depending on your taxable income and filing status.
Who Must File New Mexico Income Taxes?
New Mexico full-year and part-year residents of all ages must file a New Mexico state tax return if they were required to file a federal return with the Internal Revenue Service (IRS) and have income from any New Mexico source.
Resident status in New Mexico for income tax purposes depends on where you had your permanent home or domicile in the tax year and if you lived in the state for 185 days or more of the tax year.
Nonresidents, including those who live in states that do not collect state income tax, must file in New Mexico if they file a federal tax return with the IRS and derive income from the state of New Mexico.
If you are an enrolled member of an Indian nation, tribe or pueblo within New Mexico, you are not subject to income tax if all of your income was earned on those lands. However, if you worked outside the boundaries of the nation, tribe or pueblo, that income is subject to New Mexico state income tax.
What Are the Forms to Use?
All taxpayers in New Mexico, regardless of residency status, use the same New Mexico Personal Income Tax Return, Form PIT-1.
Form PIT-B is the income schedule used when you have income in New Mexico, as well as another state. Follow the instructions for this form to allocate and apportion your income, so you are only charged on earnings subject to New Mexico state tax.
Other schedules and forms related to specific tax-filing situations, such as additions and deductions or additions and deductions, are available on the New Mexico Taxation & Revenue website. You can find the forms at a local library or district office as well. You may also call 866-285-2996 to receive forms by mail.
What Is the Tax Rate in New Mexico?
New Mexico state tax is applied to the same earnings and income subject to federal tax and ranges from 1.7 percent to 5.9 percent, depending on filing status and taxable income.
Single taxpayers or those filing separately will fall into a tax rate based upon taxable income:
- 1.7 percent for taxable income from $0 to $5,500
- 3.2 percent for taxable income from $5,501 to $11,000
- 4.7 percent for taxable income from $11,001 to $16,000
- 4.9 percent for taxable income from $16,001 to $210,000
- 5.9 percent for taxable income over $210,001
The tax bracket of those filing jointly or as head of household is determined by taxable income as well:
- 1.7 percent for taxable income from $0 to $8,000
- 3.2 percent for taxable income from $8,001 to $16,000
- 4.7 percent for taxable income from $16,001 to $24,000
- 4.9 percent for taxable income from $24,001 to $315,000
- 5.9 percent for taxable income over $315,000
What Are the Filing Deadline and Extension Process?
New Mexico state tax returns must be postmarked or received by Monday, April 18, 2022. Extension requests are due that same day.
Taxpayers in New Mexico may apply for a six-month extension to file with Form RPD-41096 and submit it to: Taxation and Revenue Department, P.O. Box 630, Santa Fe, NM 87504-0630 by April 18, 2022.
With an extension to file, your completed New Mexico tax return will be due Monday, October 17, 2022.
If you have already applied to the IRS for a federal extension to file, you are not required to file a form with new Mexico.
An extension to file does not grant you an extended time to pay.
What Are the Penalties for Late Filing and Underpayment of Taxes?
New Mexico begins charging interest on late taxes even if you receive an extension to file. Interest is calculated on a daily basis at the rate set by the U.S. Internal Revenue Code for individual income tax purposes. For the 2021 tax year, this rate is 3 percent annually or approximately .0082 percent daily.
There is also a negligence penalty of 2 percent on the total tax due for every month the bill goes unpaid, to a maximum of 20 percent of your total tax payments due.
Rather than incur penalties, it is recommended to set up a payment plan if you have difficulties paying your tax bill. While interest and penalties will continue to accrue, you will avoid the negligence penalty, as well as any additional fees encountered due to collection activity on your account.
Where Do I Mail/E-file My New Mexico Return?
You may e-file through the New Mexico Department of Taxation & Revenue website. The Taxpayer Access Point (TAP) is a free e-filing system. New Mexico taxpayers can set up an account on the TAP website and then follow the system prompts to file and submit their tax returns online. The department also has a YouTube channel with video tutorials for using the TAP system.
You can e-file with commercially available tax preparation software, too. In this case, you submit your New Mexico state return directly through the software.
You can also fill out paper forms and mail those in to: New Mexico Taxation and Revenue Department, P. O. Box 25122, Santa Fe, New Mexico 87504-5122.
How Do I Pay Taxes Due?
All filers may pay electronically with a debit or credit card or e-check through the payment page of New Mexico's TAP system. If you are using a tax preparation software, you will also have the opportunity to pay electronically when you submit your return.
You may submit a check with Form PIT-PV, the Personal Income Tax Payment Voucher. Fill out the voucher and mail it with a check or money order payable to: New Mexico Taxation and Revenue Department, P.O. Box 8390, Santa Fe, NM 87504-8390.
Where Can I Check My New Mexico Refund Status?
To check by phone, call 866-285-2996.
Allow six to eight weeks for e-filed returns to be processed and up to 12 weeks for paper returns before inquiring about your refund status.
What About State Taxes if You're Self-employed?
Depending on the structure of your business, when you are self-employed, you may be required to submit estimated tax payments to the State of New Mexico. Check with your tax preparation professional to determine how to report your self-employment income on your New Mexico tax return.
What About New Mexico State Taxes if You're a Business?
If your business generates income in New Mexico and is required to file a federal corporation income tax return, you will need to file Form CIT-1 in New Mexico. The corporate business tax is 4.8 percent on taxable business income up to $500,000. Businesses with more than $500,000 in taxable income pay 5.9 percent on the excess.
Rates and dates in this article are correct as of publication. Check for any changes at the New Mexico Taxation & Revenue website before you file.
Melissa is a writer and editor from Chicago, with a background in small business ownership. After selling her business, she moved into marketing for nonprofits and now manages volunteers at a large medical association. She is a writing and editing contractor and contributed to dozens of blogs and websites.