New Mexico uses a six-bracket graduated income tax ranging from 1.50% to 5.90% (statute 7-2-7 NMSA). New Mexico uses a Gross Receipts Tax (GRT) at 4.88% instead of a traditional sales tax,the GRT is levied on sellers but typically passed through to buyers. Food for home consumption is excluded from GRT via a seller deduction mechanism (§ 7-9-92 NMSA), not a blanket exemption. New Mexico uses the federal standard deduction by reference (statute 7-2-2N(1)),no separate NM dollar figure.
State Income Tax
1.50% – 5.90%
Gross Receipts Tax (state)
4.88%
Standard Deduction
Federal (§ 7-2-2N)
Food GRT
0% (deduction)
New Mexico Income Tax Brackets 2026
Six brackets confirmed from statute 7-2-7 NMSA. MFJ and HoH filers use the same thresholds ($8,000 / $25,000 / $50,000 / $100,000 / $315,000). MFS filers use $4,000 / $12,500 / $25,000 / $50,000 / $157,500.
New Mexico Taxable Income (Single)
Rate
$0 – $5,500
1.50%
$5,500 – $16,500
3.20%
$16,500 – $33,500
4.30%
$33,500 – $66,500
4.70%
$66,500 – $210,000
4.90%
Over $210,000
5.90%
New Mexico Standard Deduction,Federal Conformity by Reference
New Mexico does not set its own standard deduction dollar amount. Per statute 7-2-2N(1) NMSA, New Mexico uses the federal standard deduction. For TY2026: $16,100 (single / MFS); $32,200 (married filing jointly); $24,150 (head of household). These are the same amounts as on the federal return and update each year as the federal figure changes.
New Mexico Gross Receipts Tax,Not a Traditional Sales Tax
New Mexico is one of the few states that uses a Gross Receipts Tax (GRT) rather than a retail sales tax. The legal difference matters: the GRT is imposed on the seller's gross receipts, not on the buyer directly. However, sellers are permitted to separately state the GRT on invoices and pass it through to customers,so it functions like a sales tax from a buyer's perspective. The state GRT rate is 4.88% (reduced from 5.0% effective July 1, 2023). Local GRT increments vary by municipality and county.
New Mexico Food,GRT Deduction Mechanism
Food for home consumption is effectively exempt from the New Mexico GRT, but the legal mechanism is a seller deduction under § 7-9-92 NMSA,not a blanket exemption. Sellers deduct qualifying food receipts from their GRT base, resulting in a 0% effective rate on those sales. This distinction can matter at the local level: local GRT increment ordinances vary in whether they adopt the state food deduction. Excluded from the deduction: prepared food, food sold at restaurants, alcoholic beverages, and certain specialty items.
OBBBA Conformity,New Mexico 2026 Legislation, Individual Status Pending
New Mexico enacted 2026 legislation addressing OBBBA provisions. The corporate addback of OBBBA items is confirmed. However, the individual treatment of qualified tip income, overtime, and senior bonus deductions has not been confirmed in New Mexico TRD published guidance as of mid-2026. Verify from NM TRD guidance when released.
New Mexico uses a six-bracket graduated income tax ranging from 1.50% to 5.90%, per statute 7-2-7 NMSA. For single filers, the brackets are: 1.50% ($0–$5,500); 3.20% ($5,501–$16,500); 4.30% ($16,501–$33,500); 4.70% ($33,501–$66,500); 4.90% ($66,501–$210,000); and 5.90% above $210,000. MFJ and HoH filers use higher thresholds.
What is the New Mexico Gross Receipts Tax,is it the same as a sales tax?
New Mexico uses a Gross Receipts Tax (GRT) instead of a traditional sales tax. The key legal difference: the GRT is levied on sellers (businesses) on their gross receipts, rather than on buyers at the point of sale. In practice, sellers typically pass the GRT through to customers in a way that looks like a sales tax on your receipt. The state GRT rate is 4.88% (reduced from 5.0% effective July 1, 2023). Local governments add their own GRT increments on top.
Does New Mexico tax groceries?
Effectively no,food for home consumption is excluded from New Mexico's GRT via the food deduction at § 7-9-92 NMSA. Sellers deduct qualifying food sales from their GRT base, resulting in a 0% effective rate on those sales. This is a seller deduction mechanism,not a blanket exemption. The distinction matters: some local GRT increments may or may not honor the deduction, so local rates on food can vary. Excluded from the deduction: prepared food, restaurant food, and certain specialty items.
What standard deduction does New Mexico use?
New Mexico uses the federal standard deduction by reference (statute 7-2-2N(1) NMSA). New Mexico filers claim the same standard deduction as on their federal return. For TY2026, the federal standard deduction is: $16,100 (single); $32,200 (married filing jointly); $24,150 (head of household). New Mexico does not set its own separate deduction amount,the amount updates automatically with the federal figure.
Does New Mexico conform to the OBBBA tips and overtime deductions?
New Mexico enacted 2026 legislation addressing certain OBBBA provisions. However, individual treatment of the qualified tip income deduction, overtime deduction, and senior bonus deduction has not been confirmed in New Mexico Taxation and Revenue Department (TRD) published guidance as of mid-2026. The corporate addback of OBBBA deductions is confirmed. Verify from NM TRD guidance when published.
Does New Mexico have local income taxes?
No local income taxes. New Mexico does have local GRT increments on top of the state 4.875% rate,cities and counties impose additional GRT increments that vary by location, with some reaching 4.3% above the state rate. There is no local income tax.
We use cookies for analytics (Google Analytics 4) and advertising (Google AdSense). Your calculator inputs never leave your browser.Learn more
