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August 21, 2019
2019-1501

New Mexico personal income tax rates revised starting in 2021

Under legislation recently enacted L. 2019, HB6 (c. 270) and effective January 1, 2021, the personal income tax rates are revised as shown below, with the highest tax rate increasing from the current 4.9% to 5.9%.

Currently, employers can withhold New Mexico income tax at the flat rate of 4.9% on supplemental wages. It is assumed that the supplemental withholding rate for New Mexico state income tax withholding purposes will increase to 5.9% in 2021; however, confirmation is needed from the New Mexico Department of Revenue.

For married individuals filing separate returns:

If the taxable income is:

The tax is:

Of the excess over:

Not over $4,000

1.7%

 

Over $4,000 but not over $8,000

$68 +3.2%

$4,000

Over $8,000 but not over $12,000

$196 + 4.7%

$8,000

Over $12,000 but not over $157,500

$384 + 4.9%

$12,000

Over $157,500

$7,513.50 + 5.9%

$157,500

For heads of household, surviving spouses and married individuals filing joint returns:

If the taxable income is:

The tax is:

Of the excess over:

Not over $8,000

1.7%

 

Over $8,000 but not over $16,000

$136,00 + 3.2%

$8,000

Over $16,000 but not over $24,000

$392.00 + 4.7%

$16,000

Over $24,000 but not over $315,000

$768.00 + 4.9%

$24,000

Over $315,000

$15,027 + 5.9%

$315,000

For single individuals and for estates and trusts:

If the taxable income is:

The tax is:

Of the excess over:

Not over $5,500

1.7%

 

Over $5,500 but not over $11,000

3.2% + $93.50

$5,500

Over $11,000 but not over $16,000

4.7% + $269.50

$11,000

Over $16,000 but not over $210,000

4.9% + $504.50

$16,000

Over $210,000

5.9% + $10,010.50

$210,000

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Advisory Services - Employment Tax Advisory Services
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)

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