New Mexico Income Tax Rates 2025
New Mexico has a progressive income tax system with 5 brackets and rates ranging from 1.7% to 5.9%. The top rate applies to income over $210,000 for single filers, placing New Mexico in the mid-range of state income tax rates.
Tax Type
Progressive
Rate Range
1.7% – 5.9%
Brackets
5
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New Mexico is only part of the equation — federal taxes apply too.
State Tax Ranking
At $75,000 income (single filer), New Mexico ranks #27 out of 51 states — where #1 is the lowest tax burden.
Best states to move to from New Mexico →Tax at Different Income Levels
| Income | State Tax | Effective Rate | Take-Home |
|---|---|---|---|
| $50,000 | $2,171 | 4.34% | $43,958 |
| $75,000 | $3,396 | 4.53% | $63,656 |
| $100,000 | $4,621 | 4.62% | $81,931 |
| $150,000 | $7,071 | 4.71% | $117,863 |
| $200,000 | $9,521 | 4.76% | $153,413 |
Single filer, standard deduction, 2025 tax year. Take-home is after federal + state income tax (excludes FICA).
2025 Tax Brackets — Single Filer
| Taxable Income | Rate |
|---|---|
| $0 – $5,500 | 1.7% |
| $5,500 – $11,000 | 3.2% |
| $11,000 – $16,000 | 4.7% |
| $16,000 – $210,000 | 4.9% |
| Over $210,000 | 5.9% |
2025 Tax Brackets — Married Filing Jointly
| Taxable Income | Rate |
|---|---|
| $0 – $8,000 | 1.7% |
| $8,000 – $16,000 | 3.2% |
| $16,000 – $24,000 | 4.7% |
| $24,000 – $315,000 | 4.9% |
| Over $315,000 | 5.9% |
Tax Overview
This state uses a progressive income tax system with multiple brackets, similar to the federal system. Only the income within each bracket is taxed at that rate, so your effective state rate is lower than the top bracket. Tax planning strategies include maximizing pre-tax retirement contributions to reduce state-taxable income.
Tax Planning Tip
In a progressive-bracket state, pre-tax 401(k) and HSA contributions reduce your state tax bill along with federal tax. If you are near a bracket boundary, an additional contribution can drop you into a lower state bracket.
New Mexico's progressive tax applies marginal rates to each bracket of income. The state uses federal adjusted gross income as the starting point and offers various deductions and credits. New Mexico exempts most Social Security benefits from taxation and provides additional exemptions for low-income seniors.
Property Tax & Cost of Living
Property tax rate is the state average effective rate. Actual rates vary by county. COL index from BEA Regional Price Parities.
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Frequently asked questions
What is New Mexico's income tax rate in 2025?
New Mexico has a progressive income tax with 5 brackets ranging from 1.7% to 5.9%. Your effective rate depends on your total taxable income.
Does New Mexico tax Social Security benefits?
New Mexico exempts most Social Security benefits from taxation and provides additional exemptions for low-income seniors.