New Mexico Tax Calculator 2025
Calculate your New Mexico state income tax with our comprehensive 2025 calculator featuring the Land of Enchantment's progressive tax rates from 1.7% to 5.9%, retirement-friendly benefits, and advanced tax planning tools for New Mexico's diverse energy and tourism economy.
Calculate Your New Mexico Tax
Enter your income information to calculate New Mexico's progressive state income tax with rates ranging from 1.7% to 5.9% plus applicable deductions and Land of Enchantment considerations.
New Mexico Tax Structure 2025
New Mexico operates a progressive income tax system with rates ranging from 1.7% to 5.9%, making it one of the most tax-friendly states in the Southwest. The Land of Enchantment provides excellent benefits for retirees and military veterans.
NM Progressive Tax Brackets (2025)
- 1.7% on income up to $5,500 (single) / $11,000 (joint)
- 3.2% on income $5,501-$11,000 (single) / $11,001-$22,000 (joint)
- 4.7% on income $11,001-$16,000 (single) / $22,001-$32,000 (joint)
- 5.9% on income over $16,000 (single) / $32,000 (joint)
Standard Deductions (2025)
- Single: $12,950
- Married Filing Jointly: $25,900
- Married Filing Separately: $12,950
- Head of Household: $19,400
New Mexico Tax Benefits and Land of Enchantment Advantages
New Mexico provides excellent tax benefits, particularly for retirees, military veterans, and energy workers. The state's commitment to being retirement-friendly and supporting diverse industries creates significant tax advantages.
- Personal Exemption: $4,050 per taxpayer and qualifying dependent
- Social Security Exemption: Complete exemption - no tax on Social Security benefits
- Military Retirement Exemption: Full exemption for military retirement pay
- Retirement Income Deduction: Up to $8,000 annual deduction for pension income
- Energy Sector Benefits: Depletion allowances and special deductions for oil and gas
- Low-Income Tax Credits: Working families tax credit and rebate programs
- Property Tax Benefits: Veterans and seniors property tax exemptions
New Mexico Residency and Retirement Tax Planning
Understanding New Mexico residency requirements and retirement tax planning strategies is important given the state's excellent retirement benefits and diverse economy.
Establishing NM Residency
New Mexico considers you a resident if you are domiciled in New Mexico or you maintain a permanent place of abode in New Mexico and spend more than 185 days in the state during the tax year.
Retirement Planning Benefits
New Mexico is one of the most retirement-friendly states with no tax on Social Security, deductions for retirement income, military pay exemption, and reasonable overall tax rates.
Energy Sector Advantages
New Mexico's energy economy benefits from special depletion allowances for oil and gas operations, equipment deductions, and various energy sector tax incentives.
Military Benefits
New Mexico offers excellent military benefits including full military retirement pay exemption, veterans property tax exemptions, and special considerations for military families.
Frequently Asked Questions
What are New Mexico's income tax rates for 2025?
New Mexico has progressive income tax rates ranging from 1.7% to 5.9% for 2025. The rates increase across four brackets, with the top rate of 5.9% applying to income over $210,000 for single filers and $420,000 for joint filers.
Is New Mexico tax-friendly for retirees?
New Mexico is very retirement-friendly with no tax on Social Security benefits, deductions for retirement income including pensions and 401(k) withdrawals, military retirement pay exemption, and relatively low overall tax rates.
What is New Mexico's sales tax rate?
New Mexico has a state gross receipts tax (similar to sales tax) with varying rates by location, typically ranging from 5.0% to 9.5% combined with local taxes, depending on the specific municipality.
Does New Mexico tax oil and gas income?
New Mexico taxes oil and gas income as ordinary income at progressive rates (1.7%-5.9%), but provides various energy sector deductions, depletion allowances, and special treatment for qualifying operations.
What deductions are available for New Mexico taxpayers?
New Mexico offers standard deductions, personal exemptions, retirement income deductions, military pay exemption, Social Security exemption, energy sector deductions, and various credits for low-income taxpayers.
How does New Mexico compare to neighboring states for taxes?
New Mexico is generally tax-friendly compared to neighboring states with moderate income tax rates, no Social Security tax, and reasonable overall tax burden, making it competitive in the Southwest region.