New Mexico Releases 2025 Withholding Formula

New Mexico’s 2025 withholding formula was released Nov. 18 by the state Department of Taxation and Revenue.

The lowest nonzero tax rate used in the formula decreased to 1.5%, from 1.7%, while the highest rate remained 5.9%. The distribution of tax rates across brackets adjusted so that rates of 3.2%, 4.3%, and 4.7% apply to two brackets each, followed by brackets of 4.9% and 5.9%. Previously, a 4.9% rate applied to five different brackets.

The zero tax bracket covers income of up to $7,500 annually for single employees, $11,250 annually for heads of households, or $15,000 annually for married employees, ...