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Fill Out a Valid New Mexico Withholding Template

The New Mexico Withholding Tax Form, outlined in the FYI-104 publication by the New Mexico Taxation and Revenue Department, serves as a pivotal document for both employers and employees in the state, guiding the withholding of state income taxes from wages. It has undergone revisions to align with changes in federal tax laws, notably eliminating adjustments related to personal allowances following the 2020 update to the Federal Form W-4. The form plays a critical role in ensuring that the correct amount of tax is withheld, thereby preventing under or overpayment of state taxes by New Mexico residents. For those seeking to navigate these requirements accurately, understanding how to properly complete and utilize this form is key. To get started on filling out the New Mexico Withholding Tax Form, click the button below.

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Fill Out a Valid New Mexico Withholding Template

Overview

Navigating tax obligations is essential for both employers and employees, and understanding the specifics can significantly ease this process. The New Mexico Withholding Tax form, FYI-104, serves as a key tool in this regard, offering comprehensive guidance on the state's withholding tax system, effective January 1, 2022. Importantly, this document outlines that adjustments for New Mexico withholding will no longer be made based on the number of allowances indicated on pre-2020 Federal Form W-4, signaling a shift in the way withholdings are calculated. It emphasizes the need for employees to use the New Mexico state withholding tables if they continue to utilize an older version of the Federal W-4 for state tax purposes. In addition to detailing these critical changes, the FYI-104 form provides valuable information on who is required to withhold taxes, how the withholding amount is determined, and the correct usage of withholding tax tables. Additionally, it addresses how to report and pay these taxes, management of additional withholding amounts, specifics on withholding for gambling winnings, and guidance for handling tax statements and reconciliation. This comprehensive form is vital for employers in ensuring compliance with state taxation regulations, offering a pathway through the often complex landscape of tax withholding in New Mexico.

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FYI-104

FOR YOUR INFORMATION

New Mexico

Taxation and Revenue Department

Tax Information/Policy Office  P.O. Box 630  Santa Fe, New Mexico

87504-0630

NEW MEXICO

WITHHOLDING TAX

Effective January 1, 2023

Please note: There are no longer adjustments made to New Mexico withholding due to the number of allowances taken on pre-2020 Federal Form W-4. However, employees should continue to use the correct number of withholding allowances if using pre-2020 Federal Form W-4. Employees may continue to use any Federal Form W-4 for New Mexico withholding but the New Mexico state withholding tables found in this publication should be used.

This publication contains general information on the New Mexico withholding tax and tax tables for the percentage method of withholding. Taxpayers should be aware that subsequent legislation, regulations, court decisions, revenue rulings, notices and announcements may affect the accuracy of its contents. For more information, please contact the nearest tax district field office or check the department’s web site at www.tax.newmexico.gov.

CONTENTS
General Information For New Mexico Withholding Tax	2
Changes to forms beginning 2020	2
Who Must Withhold	2
Amount To Withhold	2
How To Use The Withholding Tax Tables	2
How To Report And Pay Withholding Taxes	3
Additional Withholding Amounts	3
Withholding On Gambling Winnings	3
Annual Withholding Statements	3
Annual Reconciliation	4
Withholding From Irregular Or Supplemental Wages Or Fringe Benefits	4
Special Situations	4
For Further Information	4
New Mexico State Wage Withholding Tax Tables	5

FYI-104  REV. 11/2022  page 1

New Mexico Taxation and Revenue Department

General Information For

New Mexico Withholding Tax

New Mexico withholding tax is similar to federal withholding tax. It is calculated based on an estimate of an employee or individual’s New Mexico income tax liability and is then credited against the employee or individual’s actual income tax liability on that person’s New Mexico personal income tax return.

Changes to forms beginning 2020

The Federal government issued a revised Federal Form W-4 in tax year 2020. The 2020 and later W-4 forms do not require employees to certify the number of allowances for federal withholding purposes. According to federal guidelines, employers may keep both 2020 and subsequent W-4 forms and pre-2020 W-4 forms on file for their employees, depending on when they started employment.

New Mexico does not have a state equivalent of the Federal Form W-4. Instead, employees should complete a copy of the Federal Form W-4 for New Mexico withholding tax purposes, writing "For New Mexico State Withholding Only" across the top in prominent letters. Employers should keep the New Mexico W-4 in the employee's personnel file. This duplicate W-4 is not mandatory. It is a convenience for employer and employee.

Employees who have income that is exempt from New Mexico tax (for example, Native Americans working and living on their tribal land; military members with income from active-duty military service) should not have New Mexico tax withheld. Employees with exempt income should indicate “exempt” on line 7 of the pre-2020 W-4 form or follow Step 4(c) on the 2020 or later W-4.

Due to changes in federal law effective from 2018, state income tax liability is not reduced based on the number of personal exemptions claimed by a taxpayer. Although the Standard Deduction amount was increased for all taxpayers, the tax liability will likely increase for households with 2 or more dependents. The withholding tables in this publication have been updated to reflect these changes and the change to the federal W-4 by removing withholding allowance deduction amounts from wages. Employees will see an increase in their withholding tax as a result of these changes and to federal law. The Department would recommend that employers communicate these changes to their employees. It may be beneficial to examine the withholding changes for both federal and state taxes and determine if employees would like additional amounts withheld from their paychecks for each pay period.

Employees may opt to have additional amounts of money taken out from their paychecks for New Mexico withholding purposes. This can be requested by employees on their New Mexico withholding W-4 described above.

The Department’s guidance on withholding relies on the Internal Revenue Service information for accuracy. This publication is subject to revision as further guidance from the Internal Revenue Service is released.

Who Must Withhold

Every employer, including employers of some agricultural workers, who withholds a portion of an employee’s wages for payment of federal income tax must withhold New Mexico income tax. There is a limited exception for certain nonresident employees (See Note 2 below.) Others required to withhold New Mexico income tax include gambling establishments on paid winnings and payers of pension and annuity income when requested to do so. More information is provided on this below.

“Employer” means a person or an employee of that person, doing business in New Mexico or deriving income from New Mexico sources who pays wages to an employee for services performed. An employer is the person having control of the payment of wages.

“Employee” means a New Mexico resident who performs services either within or without the state for an employer, or a nonresident of New Mexico who performs services within the state for an employer.

“Wages” means remuneration in cash or other form for services performed by an employee for an employer.

Notes:

1)Pension and annuity income of a New Mexico resident is subject to income tax in New Mexico, but New Mexico does not require payers to withhold state income tax on pensions and annuities unless the payee requests the payer of their retirement benefits to withhold state tax. To report withholding tax, a payer must be registered with the state using TRD-41409, Non-wage Withholding Tax Return.

2)Employers are not required to withhold New Mexico income tax from wages of nonresident employees working in New Mexico for 15 or fewer days during the calendar year.

3)Persons who are self-employed should not report withholding tax on their wages. Self-employed individuals should make estimated payments using the Form PIT-ES.

Amount to Withhold

Refer to the New Mexico State Wage Withholding Tax Tables for Percentage Method of Withholding on page 5 of this publication for the amount to withhold. No withholding is required if the total withholding for an employee during any one month is less than one dollar. For New Mexico residents the employer is required to withhold New Mexico income tax from all wages of the employee regardless of the employee’s work location. For nonresident employees, the employer is required to withhold New Mexico income tax only from wages the employee earns within the state. Refer to definitions of “employer,” “employee” and “wages” to determine if withholding tax is required.

How to use the Withholding Tax Tables

Determine the amount to withhold from the appropriate tax tables starting on page 5 based on the payroll period and the employee’s filing status.

FYI-104  REV. 11/2022  page 2

New Mexico Taxation and Revenue Department

Example: A married employee has taxable wages of $1,000.00 weekly. This employee has also asked that an additional $20.00 be taken out of their check each pay period.

1.Determine the withholding based on the taxable wage payment of $1,000.00

2.Use Table 1 for weekly pay period. Use section

(b) for a married person. If the amount of wages is over $728 but not over $1,036, the amount of state tax withheld shall be $14.77 + 4.9% of excess over $728.

3.$1000.00-$728.00 = $272.00 x 0.049 = $13.33

4.$14.77 + $13.33 = $28.10 withholding tax due

5.$28.10 + $20.00 (Additional withholding requested by employee) = $48.10.

How to Report and Pay Withholding Taxes

New Mexico withholding tax prior to July 1, 2021 was reported along with gross receipts and compensating tax on the Form CRS-1. After July 1, 2021, use TRD-41414, Wage Withholding Tax Return OR TRD-41409, Non-Wage Withholding Tax Return. All tax returns can be filed online at https://tap.state.nm.us. Taxes are due on the 25th of the month following the end of the reporting period. If the 25th is on a Saturday, Sunday, or legal holiday, the tax return and payment is due the next business day. The Department uses the postmark date on the envelope to determine if the paper return was filed on time. A tax return must be filed whether or not any tax is due. If no tax is due, file a “zero” report. Do not mail cash to the Department.

Please note: TRD-41414, Wage Withholding Tax Return should be used for all employee withholding. Withholding tax from gambling winnings, pensions and annuities, or other income will be reported on the TRD-41409, Non- Wage Withholding Tax Return. The due dates for these returns will be the same as the due dates used prior to July 1, 202,1 for the CRS-1 return.

Reporting withholding information to the Department of Workforce Solutions and the Workers Compensation Administration does not fulfill your obligation to report and pay withholding tax to the Taxation and Revenue Department. Taxpayers must still file and pay using one of the methods described in the above paragraph.

If you change your business name or address or need to cancel your New Mexico Business Tax Identification Number (NMBTIN) previously known as CRS I.D. number, use Form ACD-31015, Business Tax Registration Application and Update Form available from your local district office or online at www.tax.newmexico.gov. Your reporting obligation does not cease automatically when you stop doing business or paying wages. You must notify the Department to cancel your NMBTIN.

Starting on July 1, 2021, the name of the CRS I.D. number changed to New Mexico Business Tax Identification Number (NMBTIN). The name change of the identification number will happen automatically. If you will need to cancel the use of the NMBTIN or change your business address, you will use Form ACD-31015 as explained previously.

Child support withholding is NOT reported to the Taxation and Revenue Department. For information about child support withholding you will need to contact the Human Services Department at 505-827-7200.

If you use the cumulative method of withholding for federal withholding, you may use this same method for your state withholding.

Additional Withholding Amounts

Many employees request additional amounts be withheld for federal purposes (see Form W-4) but very few consider additional withholding for state purposes. Additional state withholding may be done on the W-4 kept for New Mexico withholding purposes described above.

Withholding on Gambling Winnings

Operators, including nonprofit entities, of gambling establishments (racetracks, casinos, state lottery, bingo) must withhold 6% from winnings and file income and withholding information returns for state purposes if they are required to withhold or report for federal purposes. Operators must report and pay the amount of state tax withheld from gambling winnings prior to July 1, 2021, on the Form CRS-1, and after July 1, 2021, on the TRD- 41409, Non-Wage Withholding Tax Return is required for both residents and nonresidents.

Annual Withholding Statements

Every person who has withheld state tax during the year from wages, pensions and annuities, or gambling winnings is required to file an annual statement of withholding on or before the last day of January for each employee, pension or annuity recipient, or gambling winner. New Mexico accepts the state copy of any Federal income and withholding statement, including Federal Form W-2, W2-G, 1042-S, and 1099-R, or any substitute form acceptable to the Internal Revenue Service so long as it reflects the withholders name, address and identification number, the recipient's name and social security number, and the amount of New Mexico income and withholding. If employers have established a medical care savings account program for their employees, it is the responsibility of the employer to determine what amounts are exempt from taxation. The employer reduces the New Mexico taxable wages reported on Federal Form W-2 by the amounts established by the employer or account administrator as exempt from income tax.

Taxpayers who need to submit income and withholding statements to the Department may learn more by reviewing Publication FYI-330, Income And Withholding Information Returns And Filing Methods, available online at www.tax.newmexico.gov/forms-publications.aspx or through your local district office.

Note: Starting June 18, 2021, the law requires that employers provide information regarding state assistance for low-income New Mexicans, including information regarding tax rebates and credits for low-income tax filers provided by the state, such as the low-income comprehensive tax rebate and the working families tax

FYI-104  REV. 11/2022  page 3

New Mexico Taxation and Revenue Department

credit. The information shall be provided in English and Spanish. This information is located in B-300.10, State Assistance for Low-Income New Mexicans. This publication is available in English and Spanish and can be located on the Department’s website:

https://www.tax.newmexico.gov/forms-publications/ in the folders - Publications/Bulletins/300 Series – Income Taxes.

Note: Starting tax year 2019, the Department began requiring electronic submittal of income and withholding information returns for employers who have 25 or more employees. The withholding statements are due at the end of January. Electronic submissions can be submitted through the Combined Federal/State Filing Program or by using TAP at https://tap.state.nm.us

Annual Reconciliation

New Mexico withholding taxpayers may file Form RPD- 41072, Annual Summary of Withholding Tax. The report is available for taxpayer’s use but is not required to be filed. This report allows for the taxpayer to reconcile the total amounts shown as withheld on annual withholding statements furnished to withholdees (Federal Forms W-2, W-2G or 1099-R) with the total tax withheld and paid to New Mexico prior to July 1, 2021, on Form CRS-1, and after July 1, 2021, on the TRD-41414, Wage Withholding Tax Return or TRD-41409, Non-Wage Withholding Tax Return. If the taxpayer has underreported withholding on the withholding return, amended returns for the period(s) in which underreporting occurred should be attached and the difference remitted to the Department. If an overpayment of withholding was made, attach Form RPD-41071, Application for Refund and the amended returns for the period(s) in which overpayments occurred. For more information on this see FYI-330, Income and Withholding Information Returns and Filing Methods.

Withholding from Irregular or

Supplemental Wages or Fringe Benefits

The same method used for calculating federal withholding on irregular or supplemental wages should be used for state withholding. If the taxpayer uses the cumulative method of withholding for federal withholding, this same method may be used for state withholding. If withholding from fringe benefits for federal purposes, the taxpayer must also withhold from fringe benefits for state purposes using the same method used for calculating federal withholding. If the federal withholding is calculated using a flat percent, a flat 5.9 percent of the supplemental wage or fringe benefit amount should be withheld for state tax purposes.

NOTE: In the case of a married employee who has elected withholding at the higher single rate for federal purposes, the single rate for New Mexico state withholding purposes must also be used.

Special Situations

Generally, if an employee’s withholding is correct for federal purposes, it will be correct for state income tax purposes, but there are certain situations in which an

employee may be correctly withholding for federal purposes but under withhold for state purposes:

1)If the employee has supplemental, overtime pay, bonuses that are paid separately from their normal wages, the Department recommends using Table 8 on page 8.

2)If the employee increased W-4 allowances to offset expected federal tax credits such as the Child Tax Credit or credits for child or dependent care expenses. (If the employee wishes to reduce their withholding for state purposes they can use the 2020 Federal Form W- 4 (Step 4b)

3)If the employee requested that additional amounts be withheld for federal purposes.

There are also situations where individuals may have income that is subject to federal taxation but exempt from taxation by New Mexico. In these situations, New Mexico withholding on the exempt income would not be necessary.

Examples of income exempt from New Mexico tax are:

1)Income of a Native American who is a member of a New Mexico federally recognized Indian nation, tribe or pueblo that was wholly earned on the lands of the Indian nation or pueblo of which the individual is an enrolled member while domiciled on that land, Indian nation or pueblo.

2)Income from active-duty military service or the income of spouses of an active duty service members who elect to keep their out-of-state residence or use the same out-of-state residence as the servicemember.

Employment may require some New Mexico residents to spend extensive time in another state with an income tax that is comparable to the New Mexico income tax. Residents of New Mexico are generally subject to New Mexico income tax on all their income, but if that income is also taxed by another state, New Mexico allows a credit for the other state’s income tax on that income on their personal income tax return. New Mexico withholding tax can be reduced or eliminated on such wages. To reduce or eliminate withholding on such wages, taxpayers should indicate this on their Form W-4 for New Mexico withholding tax.

For Further Information

If employees express concern about their withholding, employers may recommend that they obtain the following publications:

Internal Revenue Service Form W-4, Employee’s Withholding Allowance Certificate. (New Mexico does not have a state equivalent of the federal W-4 form. Employees should complete a copy of the federal W- 4 for New Mexico, writing "For New Mexico State Withholding Only" across the top in prominent letters.

Internal Revenue Service Publication 919 Is My Withholding Correct? (Call 1-800-829-3676 to order this publication.)

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New Mexico Taxation and Revenue Department

New Mexico State Wage Withholding Tax Tables for Percentage Method of Withholding

(For wages paid on or after January 1, 2023)

										Table 1 - If the Payroll Period with Respect to an Employee is WEEKLY
(a) SINGLE person										(b) MARRIED person										(c) HEAD of HOUSEHOLD person
If the amount					The amount of state					If the amount					The amount of state					If the amount					The amount of state
of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:
Not Over		$	133		$0.00					Not Over		$	266		$0.00					Not Over		$	200		$0.00
Over:		But not over:					of excess over -			Over:		But not over:					of excess over -			Over:		But not over:					of excess over -
$	133	$	239				1.7%	$	133	$	266	$	420	$	-		1.7%	$	266	$	200	$	354				1.7%	$	200
$	239	$	345	$	1.80	+	3.2%	$	239	$	420	$	574	$	2.62	+	3.2%	$	420	$	354	$	508	$	2.62	+	3.2%	$	354
$	345	$	441	$	5.18	+	4.7%	$	345	$	574	$	728	$	7.54	+	4.7%	$	574	$	508	$	662	$	7.54	+	4.7%	$	508
$	441	$	633	$	9.70	+	4.9%	$	441	$	728	$	1,036	$	14.77	+	4.9%	$	728	$	662	$	969	$	14.77	+	4.9%	$	662
$	633	$	941	$	19.13	+	4.9%	$	633	$	1,036	$	1,497	$	29.85	+	4.9%	$	1,036	$	969	$	1,431	$	29.85	+	4.9%	$	969
$	941	$	1,383	$	34.20	+	4.9%	$	941	$	1,497	$	2,189	$	52.46	+	4.9%	$	1,497	$	1,431	$	2,123	$	52.46	+	4.9%	$	1,431
$	1,383	$	2,537	$	55.88	+	4.9%	$	1,383	$	2,189	$	4,113	$	86.38	+	4.9%	$	2,189	$	2,123	$	4,046	$	86.38	+	4.9%	$	2,123
$	2,537	$	4,172	$	112.41	+	4.9%	$	2,537	$	4,113	$	6,324	$	180.62	+	4.9%	$	4,113	$	4,046	$	6,258	$	180.62	+	4.9%	$	4,046
$	4,172		and over	$	192.51	+	5.9%	$	4,172	$	6,324		and over	$	288.98	+	5.9%	$	6,324	$	6,258		and over	$	288.98	+	5.9%	$	6,258

									Table 2 - If the Payroll Period with Respect to an Employee is BI-WEEKLY
(a) SINGLE person										(b) MARRIED person										(c) HEAD of HOUSEHOLD person
If the amount					The amount of state					If the amount					The amount of state					If the amount					The amount of state
of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:
Not Over		$	266		$0.00					Not Over		$	533		$0.00					Not Over		$	400		$0.00
Over:		But not over:					of excess over -			Over:		But not over:					of excess over -			Over:		But not over:					of excess over -
$	266	$	478				1.7%	$	266	$	533	$	840				1.7%	$	533	$	400	$	708				1.7%	$	400
$	478	$	689	$	3.60	+	3.2%	$	478	$	840	$	1,148	$	5.23	+	3.2%	$	840	$	708	$	1,015	$	5.23	+	3.2%	$	708
$	689	$	882	$	10.37	+	4.7%	$	689	$	1,148	$	1,456	$	15.08	+	4.7%	$	1,148	$	1,015	$	1,323	$	15.08	+	4.7%	$	1,015
$	882	$	1,266	$	19.40	+	4.9%	$	882	$	1,456	$	2,071	$	29.54	+	4.9%	$	1,456	$	1,323	$	1,938	$	29.54	+	4.9%	$	1,323
$	1,266	$	1,882	$	38.25	+	4.9%	$	1,266	$	2,071	$	2,994	$	59.69	+	4.9%	$	2,071	$	1,938	$	2,862	$	59.69	+	4.9%	$	1,938
$	1,882	$	2,766	$	68.40	+	4.9%	$	1,882	$	2,994	$	4,379	$	104.92	+	4.9%	$	2,994	$	2,862	$	4,246	$	104.92	+	4.9%	$	2,862
$	2,766	$	5,074	$	111.75	+	4.9%	$	2,766	$	4,379	$	8,225	$	172.77	+	4.9%	$	4,379	$	4,246	$	8,092	$	172.77	+	4.9%	$	4,246
$	5,074	$	8,343	$	224.83	+	4.9%	$	5,074	$	8,225	$	12,648	$	361.23	+	4.9%	$	8,225	$	8,092	$	12,515	$	361.23	+	4.9%	$	8,092
$	8,343		and over	$	385.02	+	5.9%	$	8,343	$	12,648		and over	$	577.96	+	5.9%	$	12,648	$	12,515		and over	$	577.96	+	5.9%	$	12,515

FYI-104 REV.11/2022 Page 5

New Mexico Taxation and Revenue Department

New Mexico State Wage Withholding Tax Tables for Percentage Method of Withholding

(For wages paid on or after January 1, 2023)

									Table 3 - If the Payroll Period with Respect to an Employee is SEMI-MONTHLY
(a) SINGLE person										(b) MARRIED person										(c) HEAD of HOUSEHOLD person
If the amount					The amount of state					If the amount					The amount of state					If the amount					The amount of state
of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:
Not Over		$	289		$0.00					Not Over		$	577		$0.00					Not Over		$	433		$0.00
Over:		But not over:					of excess over -			Over:		But not over:					of excess over -			Over:		But not over:					of excess over -
$	289	$	518				1.7%	$	289	$	577	$	910				1.7%	$	577	$	433	$	767				1.7%	$	433
$	518	$	747	$	3.90	+	3.2%	$	518	$	910	$	1,244	$	5.67	+	3.2%	$	910	$	767	$	1,100	$	5.67	+	3.2%	$	767
$	747	$	955	$	11.23	+	4.7%	$	747	$	1,244	$	1,577	$	16.33	+	4.7%	$	1,244	$	1,100	$	1,433	$	16.33	+	4.7%	$	1,100
$	955	$	1,372	$	21.02	+	4.9%	$	955	$	1,577	$	2,244	$	32.00	+	4.9%	$	1,577	$	1,433	$	2,100	$	32.00	+	4.9%	$	1,433
$	1,372	$	2,039	$	41.44	+	4.9%	$	1,372	$	2,244	$	3,244	$	64.67	+	4.9%	$	2,244	$	2,100	$	3,100	$	64.67	+	4.9%	$	2,100
$	2,039	$	2,997	$	74.10	+	4.9%	$	2,039	$	3,244	$	4,744	$	113.67	+	4.9%	$	3,244	$	3,100	$	4,600	$	113.67	+	4.9%	$	3,100
$	2,997	$	5,497	$	121.06	+	4.9%	$	2,997	$	4,744	$	8,910	$	187.17	+	4.9%	$	4,744	$	4,600	$	8,767	$	187.17	+	4.9%	$	4,600
$	5,497	$	9,039	$	243.56	+	4.9%	$	5,497	$	8,910	$	13,702	$	391.33	+	4.9%	$	8,910	$	8,767	$	13,558	$	391.33	+	4.9%	$	8,767
$	9,039		and over	$	417.10	+	5.9%	$	9,039	$	13,702		and over	$	626.13	+	5.9%	$	13,702	$	13,558		and over	$	626.13	+	5.9%	$	13,558

										Table 4 - If the Payroll Period with Respect to an Employee is MONTHLY
(a) SINGLE person										(b) MARRIED person										(c) HEAD of HOUSEHOLD person
If the amount					The amount of state					If the amount					The amount of state					If the amount					The amount of state
of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:
Not Over		$	577		$0.00					Not Over		$	1,154		$0.00					Not Over		$	867		$0.00
Over:		But not over:					of excess over -			Over:		But not over:					of excess over -			Over:		But not over:					of excess over -
$	577	$	1,035				1.7%	$	577	$	1,154	$	1,821				1.7%	$	1,154	$	867	$	1,533				1.7%	$	867
$	1,035	$	1,494	$	7.79	+	3.2%	$	1,035	$	1,821	$	2,488	$	11.33	+	3.2%	$	1,821	$	1,533	$	2,200	$	11.33	+	3.2%	$	1,533
$	1,494	$	1,910	$	22.46	+	4.7%	$	1,494	$	2,488	$	3,154	$	32.67	+	4.7%	$	2,488	$	2,200	$	2,867	$	32.67	+	4.7%	$	2,200
$	1,910	$	2,744	$	42.04	+	4.9%	$	1,910	$	3,154	$	4,488	$	64.00	+	4.9%	$	3,154	$	2,867	$	4,200	$	64.00	+	4.9%	$	2,867
$	2,744	$	4,077	$	82.88	+	4.9%	$	2,744	$	4,488	$	6,488	$	129.33	+	4.9%	$	4,488	$	4,200	$	6,200	$	129.33	+	4.9%	$	4,200
$	4,077	$	5,994	$	148.21	+	4.9%	$	4,077	$	6,488	$	9,488	$	227.33	+	4.9%	$	6,488	$	6,200	$	9,200	$	227.33	+	4.9%	$	6,200
$	5,994	$	10,994	$	242.13	+	4.9%	$	5,994	$	9,488	$	17,821	$	374.33	+	4.9%	$	9,488	$	9,200	$	17,533	$	374.33	+	4.9%	$	9,200
$	10,994	$	18,077	$	487.13	+	4.9%	$	10,994	$	17,821	$	27,404	$	782.67	+	4.9%	$	17,821	$	17,533	$	27,117	$	782.67	+	4.9%	$	17,533
$	18,077		and over	$	834.21	+	5.9%	$	18,077	$	27,404		and over	$	1,252.25	+	5.9%	$	27,404	$	27,117		and over	$	1,252.25	+	5.9%	$	27,117

FYI-104 REV.11/2022 Page 6

New Mexico Taxation and Revenue Department

New Mexico State Wage Withholding Tax Tables for Percentage Method of Withholding

(For wages paid on or after January 1, 2023)

									Table 5 - If the Payroll Period with Respect to an Employee is QUARTERLY
(a) SINGLE person										(b) MARRIED person										(c) HEAD of HOUSEHOLD person
If the amount					The amount of state					If the amount					The amount of state					If the amount					The amount of state
of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:
Not Over		$	1,731		$0.00					Not Over		$	3,463		$0.00					Not Over		$	2,600		$0.00
Over:		But not over:					of excess over -			Over:		But not over:					of excess over -			Over:		But not over:					of excess over -
$	1,731	$	3,106				1.7%	$	1,731	$	3,463	$	5,463				1.7%	$	3,463	$	2,600	$	4,600				1.7%	$	2,600
$	3,106	$	4,481	$	23.38	+	3.2%	$	3,106	$	5,463	$	7,463	$	34.00	+	3.2%	$	5,463	$	4,600	$	6,600	$	34.00	+	3.2%	$	4,600
$	4,481	$	5,731	$	67.38	+	4.7%	$	4,481	$	7,463	$	9,463	$	98.00	+	4.7%	$	7,463	$	6,600	$	8,600	$	98.00	+	4.7%	$	6,600
$	5,731	$	8,231	$	126.13	+	4.9%	$	5,731	$	9,463	$	13,463	$	192.00	+	4.9%	$	9,463	$	8,600	$	12,600	$	192.00	+	4.9%	$	8,600
$	8,231	$	12,231	$	248.63	+	4.9%	$	8,231	$	13,463	$	19,463	$	388.00	+	4.9%	$	13,463	$	12,600	$	18,600	$	388.00	+	4.9%	$	12,600
$	12,231	$	17,981	$	444.63	+	4.9%	$	12,231	$	19,463	$	28,463	$	682.00	+	4.9%	$	19,463	$	18,600	$	27,600	$	682.00	+	4.9%	$	18,600
$	17,981	$	32,981	$	726.38	+	4.9%	$	17,981	$	28,463	$	53,463	$	1,123.00	+	4.9%	$	28,463	$	27,600	$	52,600	$	1,123.00	+	4.9%	$	27,600
$	32,981	$	54,231	$	1,461.38	+	4.9%	$	32,981	$	53,463	$	82,213	$	2,348.00	+	4.9%	$	53,463	$	52,600	$	81,350	$	2,348.00	+	4.9%	$	52,600
$	54,231		and over	$	2,502.63	+	5.9%	$	54,231	$	82,213		and over	$	3,756.75	+	5.9%	$	82,213	$	81,350		and over	$	3,756.75	+	5.9%	$	81,350

									Table 6 - If the Payroll Period with Respect to an Employee is SEMI-ANNUAL
(a) SINGLE person										(b) MARRIED person										(c) HEAD of HOUSEHOLD person
If the amount					The amount of state					If the amount					The amount of state					If the amount					The amount of state
of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:
Not Over		$	3,463		$0.00					Not Over		$	6,925		$0.00					Not Over		$	5,200		$0.00
Over:		But not over:					of excess over -			Over:		But not over:					of excess over -			Over:		But not over:					of excess over -
$	3,463	$	6,213				1.7%	$	3,463	$	6,925	$	10,925				1.7%	$	6,925	$	5,200	$	9,200				1.7%	$	5,200
$	6,213	$	8,963	$	46.75	+	3.2%	$	6,213	$	10,925	$	14,925	$	68.00	+	3.2%	$	10,925	$	9,200	$	13,200	$	68.00	+	3.2%	$	9,200
$	8,963	$	11,463	$	134.75	+	4.7%	$	8,963	$	14,925	$	18,925	$	196.00	+	4.7%	$	14,925	$	13,200	$	17,200	$	196.00	+	4.7%	$	13,200
$	11,463	$	16,463	$	252.25	+	4.9%	$	11,463	$	18,925	$	26,925	$	384.00	+	4.9%	$	18,925	$	17,200	$	25,200	$	384.00	+	4.9%	$	17,200
$	16,463	$	24,463	$	497.25	+	4.9%	$	16,463	$	26,925	$	38,925	$	776.00	+	4.9%	$	26,925	$	25,200	$	37,200	$	776.00	+	4.9%	$	25,200
$	24,463	$	35,963	$	889.25	+	4.9%	$	24,463	$	38,925	$	56,925	$	1,364.00	+	4.9%	$	38,925	$	37,200	$	55,200	$	1,364.00	+	4.9%	$	37,200
$	35,963	$	65,963	$	1,452.75	+	4.9%	$	35,963	$	56,925	$	106,925	$	2,246.00	+	4.9%	$	56,925	$	55,200	$	105,200	$	2,246.00	+	4.9%	$	55,200
$	65,963	$	108,463	$	2,922.75	+	4.9%	$	65,963	$	106,925	$	164,425	$	4,696.00	+	4.9%	$	106,925	$	105,200	$	162,700	$	4,696.00	+	4.9%	$	105,200
$	108,463		and over	$	5,005.25	+	5.9%	$	108,463	$	164,425		and over	$	7,513.50	+	5.9%	$	164,425	$	162,700		and over	$	7,513.50	+	5.9%	$	162,700

FYI-104 REV.11/2022 Page 7

New Mexico Taxation and Revenue Department

New Mexico State Wage Withholding Tax Tables for Percentage Method of Withholding

(For wages paid on or after January 1, 2023)

										Table 7 - If the Payroll Period with Respect to an Employee is ANNUAL
(a) SINGLE person										(b) MARRIED person										(c) HEAD of HOUSEHOLD person
If the amount					The amount of state					If the amount					The amount of state					If the amount					The amount of state
of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:
Not Over		$	6,925		$0.00					Not Over		$	13,850		$0.00					Not Over		$	10,400		$0.00
Over:		But not over:					of excess over -			Over:		But not over:					of excess over -			Over:		But not over:					of excess over -
$	6,925	$	12,425				1.7%	$	6,925	$	13,850	$	21,850				1.7%	$	13,850	$	10,400	$	18,400				1.7%	$	10,400
$	12,425	$	17,925	$	93.50	+	3.2%	$	12,425	$	21,850	$	29,850	$	136.00	+	3.2%	$	21,850	$	18,400	$	26,400	$	136.00	+	3.2%	$	18,400
$	17,925	$	22,925	$	269.50	+	4.7%	$	17,925	$	29,850	$	37,850	$	392.00	+	4.7%	$	29,850	$	26,400	$	34,400	$	392.00	+	4.7%	$	26,400
$	22,925	$	32,925	$	504.50	+	4.9%	$	22,925	$	37,850	$	53,850	$	768.00	+	4.9%	$	37,850	$	34,400	$	50,400	$	768.00	+	4.9%	$	34,400
$	32,925	$	48,925	$	994.50	+	4.9%	$	32,925	$	53,850	$	77,850	$	1,552.00	+	4.9%	$	53,850	$	50,400	$	74,400	$	1,552.00	+	4.9%	$	50,400
$	48,925	$	71,925	$	1,778.50	+	4.9%	$	48,925	$	77,850	$	113,850	$	2,728.00	+	4.9%	$	77,850	$	74,400	$	110,400	$	2,728.00	+	4.9%	$	74,400
$	71,925	$	131,925	$	2,905.50	+	4.9%	$	71,925	$	113,850	$	213,850	$	4,492.00	+	4.9%	$	113,850	$	110,400	$	210,400	$	4,492.00	+	4.9%	$	110,400
$	131,925	$	216,925	$	5,845.50	+	4.9%	$	131,925	$	213,850	$	328,850	$	9,392.00	+	4.9%	$	213,850	$	210,400	$	325,400	$	9,392.00	+	4.9%	$	210,400
$	216,925		and over	$ 10,010.50		+	5.9%	$	216,925	$	328,850		and over	$ 15,027.00		+	5.9%	$	328,850	$	325,400		and over	$ 15,027.00		+	5.9%	$	325,400

								Table 8 - If the Payroll Period with Respect to an Employee is DAILY or MISCELLANEOUS
(a) SINGLE person										(b) MARRIED person										(c) HEAD of HOUSEHOLD person
If the amount					The amount of state					If the amount					The amount of state					If the amount					The amount of state
of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:					of wages is:					tax withheld shall be:
Not Over		$	26.60		$0.00					Not Over		$	53.30		$0.00					Not Over		$	40.00		$0.00
Over:		But not over:					of excess over -			Over:		But not over:					of excess over -			Over:		But not over:					of excess over -
$	26.60	$	47.80				1.7%	$	26.60	$	53.30	$	84.00				1.7%	$	53.30	$	40.00	$	70.80				1.7%	$	40.00
$	47.80	$	68.90	$	0.36	+	3.2%	$	47.80	$	84.00	$	114.80	$	0.52	+	3.2%	$	84.00	$	70.80	$	101.50	$	0.52	+	3.2%	$	70.80
$	68.90	$	88.20	$	1.04	+	4.7%	$	68.90	$	114.80	$	145.60	$	1.51	+	4.7%	$	114.80	$	101.50	$	132.30	$	1.51	+	4.7%	$	101.50
$	88.20	$	126.60	$	1.94	+	4.9%	$	88.20	$	145.60	$	207.10	$	2.95	+	4.9%	$	145.60	$	132.30	$	193.80	$	2.95	+	4.9%	$	132.30
$	126.60	$	188.20	$	3.83	+	4.9%	$	126.60	$	207.10	$	299.40	$	5.97	+	4.9%	$	207.10	$	193.80	$	286.20	$	5.97	+	4.9%	$	193.80
$	188.20	$	276.60	$	6.84	+	4.9%	$	188.20	$	299.40	$	437.90	$	10.49	+	4.9%	$	299.40	$	286.20	$	424.60	$	10.49	+	4.9%	$	286.20
$	276.60	$	507.40	$	11.18	+	4.9%	$	276.60	$	437.90	$	822.50	$	17.28	+	4.9%	$	437.90	$	424.60	$	809.20	$	17.28	+	4.9%	$	424.60
$	507.40	$	834.30	$	22.48	+	4.9%	$	507.40	$	822.50	$ 1,264.80		$	36.12	+	4.9%	$	822.50	$	809.20	$ 1,251.50		$	36.12	+	4.9%	$	809.20
$	834.30		and over	$	38.50	+	5.9%	$	834.30	$	1,264.80		and over	$	57.80	+	5.9%	$	1,264.80	$	1,251.50		and over	$	57.80	+	5.9%	$	1,251.50

FYI-104 REV.11/2022 Page 8

New Mexico Taxation and Revenue Department

TAXPAYER INFORMATION

General Information. FYIs and Bulletins present general information with minimum technical language. All FYIs and Bulletins are free of charge and available through all local tax offices and on the Taxation and Revenue Department’s website at http://www.tax.newmexico.gov/forms-publications.aspx

Regulations. The Department establishes regulations to interpret and exemplify the various tax acts it administers. Current statutes with regulations can be located on the Departments website for free at http://www.tax.newmexico.gov/statutes-with-regulations.aspx. Specific regulations are also available at the State Records Center and Archives or on its web page at http://www.srca.nm.gov/

The Taxation and Revenue Department regulation book is available for purchase from the New Mexico Compilation Commission. Order regulation books directly from the New Mexico Compilation Commission at https://www.nmcompcomm.us/

Rulings. Rulings signed by the Secretary and approved by the Attorney General are written statements that apply to one or a small number of taxpayers. A taxpayer may request a ruling (at no charge) to clarify its tax liability or responsibility under specific circumstances. The Department will not issue a ruling to a taxpayer who is undergoing an audit, who has an outstanding assessment, or who is involved in a protest or litigation with the Department over the subject matter of the request. The Department’s rulings are compiled and available on free of charge at http://www.tax.newmexico.gov/rulings.aspx.

The request for a ruling must be in writing, include accurate taxpayer identification and the details about the taxpayer’s situation, and be addressed to the Secretary of the Taxation and Revenue Department at P.O. Box 630, Santa Fe, NM 87504-0630. The taxpayer’s representative, such as an accountant or attorney, may request a ruling on behalf of the taxpayer but must disclose the name of the taxpayer. While the Department is not required to issue a ruling when requested to do so, every request is carefully considered.

The Secretary may modify or withdraw any previously issued ruling and is required to withdraw or modify any ruling when subsequent legislation, regulations, final court decisions or other rulings invalidate a ruling or portions of a ruling.

Public Decisions & Orders. All public decisions and orders issued since July 1994 are compiled and available on the Department’s web page free of charge at http://www.tax.newmexico.gov/tax-decisions- orders.aspx.

This publication provides general information. It does not constitute a regulation, ruling, or decision issued by the Secretary of the New Mexico Taxation and Revenue Department. The Department is legally bound only by a regulation or a ruling [7-1-60, New Mexico Statutes Annotated, 1978]. In the event of a conflict between FYI and statute, regulation, case law or policy, the information in FYIs is overridden by statutes, regulations and case law. Taxpayers and preparers are responsible for being aware of New Mexico tax laws and rules. Consult the Department directly if you have questions or concerns about information provided in this FYI.

FYI-104  REV. 11/2022  page 9

New Mexico Taxation and Revenue Department

FOR FURTHER ASSISTANCE

Tax District Field Offices and the Department’s call center can provide full service and general information about the Department's taxes, taxpayer access point, programs, classes, and forms. Information specific to your filing situation, payment plans and delinquent accounts.

TAX DISTRICT FIELD OFFICES

ALBUQUERQUE

10500 Copper Pointe Avenue NE Albuquerque, NM 87123

SANTA FE

Manuel Lujan Sr. Bldg.

1200 S. St. Francis Dr.

Santa Fe, NM 87504

FARMINGTON

3501 E. Main St., Suite N

Farmington, NM 87499

LAS CRUCES

2540 S. El Paseo Bldg. #2

Las Cruces, NM 88004

ROSWELL

400 Pennsylvania Ave., Suite 200 Roswell, NM 8820

For forms and instructions visit the Department’s web site at http://www.tax.newmexico.gov

Call Center Number:

1-866-285-2996

If faxing something to a tax district field office, please fax to:

Call Center Fax Number:

1-505-841-6327

If mailing information to a tax district field office, please mail to:

Taxation and Revenue Department

P.O. Box 8485

Albuquerque, NM 87198-8485

For additional contact information please visit the Department’s website at http://www.tax.newmexico.gov/contact-us.aspx

This information is as accurate as possible as of the date specified on the publication. Subsequent legislation, new state regulations and case law may affect its accuracy. For the latest information please check the Taxation and Revenue Department’s web site at www.tax.newmexico.gov.

FYI-104  REV. 11/2022  page 10

Get New Mexico Withholding PDF Form

Document Properties

Fact	Detail
Governing Law	New Mexico Taxation and Revenue Department regulations and guidelines
Effective Date	January 1, 2022
Adjustments for Allowances	No longer adjustments made for allowances on New Mexico withholding due to federal form changes in 2020
Usage of Federal W-4	New Mexico does not have a state-specific form and uses Federal Form W-4, marked "For New Mexico State Withholding Only" for convenience
Withholding Tax Tables	Provides tax tables for the percentage method of withholding for calculating New Mexico state withholding tax

Steps to Filling Out New Mexico Withholding

Fulfilling individual tax obligations can sometimes be a daunting task, especially when dealing with state-specific documentation. In New Mexico, the process of withholding state income tax from wages, gambling winnings, and other earnings is governed by specific guidelines. The following steps are designed to simplify the process of completing necessary forms for New Mexico withholding, to ensure compliance and accuracy in fulfilling state tax requirements.

First, secure a copy of the Federal Form W-4. Although New Mexico does not have a state-specific W-4 form, this document is utilized for withholding tax purposes within the state. Ensure that "For New Mexico State Withholding Only" is written across the top in bold letters.
If the W-4 form being used is pre-2020, employees should continue to use the correct number of withholding allowances. Despite changes in federal tax law, these allowances remain relevant for state withholding calculations.
For employees with income exempt from New Mexico tax (e.g., Native Americans living and working within their tribal land, military service members on active duty), it's crucial to indicate such exemptions appropriately on the W-4 form to prevent state tax withholding.
Refer to the New Mexico State Wage Withholding Tax Tables provided by the New Mexico Taxation and Revenue Department for the percentage method of withholding. These tables are imperative for correctly determining the amount of tax to withhold from each payment period.
Use the tax tables starting on page 5 of the publication to calculate the withholding amount based on the employee's taxable wages, filing status, and pay period frequency (e.g., weekly, bi-weekly).
For those employees requesting additional withholding amounts beyond their calculated tax liability, such requests should be documented on their New Mexico withholding W-4. This is a consideration often made to accommodate personal financial planning needs.
After calculating withholding amounts, including any additional requested withholding, report and submit these taxes to the New Mexico Taxation and Revenue Department. As of July 1, 2021, use either the TRD-41414, Wage Withholding Tax Return or TRD-41409, Non-Wage Withholding Tax Return, depending on the nature of the income being reported. All returns can be filed online through the state's taxpayer access point (TAP) portal.
Ensure that all forms are completed accurately and filed timely. The due date for tax submissions is the 25th of the month following the end of the reporting period. In instances where the 25th falls on a weekend or legal holiday, the next business day serves as the due date.
Lastly, keep detailed records of all withholding tax calculations, submissions, and employee declarations. These documents are essential for verifying compliance with New Mexico tax laws and facilitating any future inquiries from either the employees or the tax authority.

Completing the New Mexico withholding tax forms with diligence and attention to detail ensures that employers accurately withhold and remit taxes on behalf of their employees, thereby upholding their tax obligations within the state. This structured approach not only simplifies the process for employers but also provides a clear pathway for compliance, benefiting all parties involved.

Frequently Asked Questions

What has changed in the New Mexico Withholding Forms starting 2020?

Starting in 2020, adjustments to New Mexico withholding due to the number of allowances taken on pre-2020 Federal Form W-4 have been eliminated. Despite these changes, employees can still use any version of the Federal Form W-4 for New Mexico withholding purposes, explicitly writing "For New Mexico State Withholding Only" on the form. This change aims to simplify the withholding process and ensure that employees' withholding aligns more closely with their New Mexico income tax liability.
Who is required to withhold New Mexico income tax?

All employers who withhold federal income tax from an employee's wages must also withhold New Mexico income tax. This includes those who pay wages for services performed within New Mexico, as well as certain payers of pensions, annuities, and gambling winnings. The requirement covers a broad scope of individuals and entities, ensuring fair and consistent withholding across different sources of income.
How should employers determine the amount to withhold for New Mexico income tax?

Employers must refer to the New Mexico State Wage Withholding Tax Tables for the Percentage Method of Withholding provided in the publication. These tables help calculate the withholding amount based on the employee’s pay period and filing status. Employers should accurately determine taxable wages and then use the specified table to find the correct withholding amount, considering any additional withholding requested by the employee.
What are the reporting and payment requirements for New Mexico withholding taxes?

Employers need to use specific forms for reporting New Mexico withholding taxes—TRD-41414 for wage withholding and TRD-41409 for non-wage withholding, like gambling winnings. Reports and payments are due on the 25th of the month following the reporting period. Employers can file these forms online, ensuring that taxes are reported and paid timely. Filing a "zero" report is necessary even if no tax is due, and employers must not mail cash payments to the Department.
Can additional amounts be withheld for New Mexico income tax purposes?

Yes, employees may request to have additional amounts withheld from their paychecks for state taxes. This is an important option for individuals who wish to ensure that enough tax is being withheld to cover their New Mexico income tax liability, especially if their financial or personal situation changes.
How are gambling winnings treated under New Mexico withholding tax?

Operators of gambling establishments must withhold 6% from winnings and report these amounts using the specified non-wage withholding tax forms. This requirement ensures that taxes on gambling winnings are collected and reported accurately, both for residents and nonresidents of New Mexico.
What is the procedure for annual withholding statements and reconciliation in New Mexico?

Employers who have withheld state taxes must file an annual statement of withholding by the end of January for each employee or payee. New Mexico accepts the state copy of federal forms like W-2 and 1099-R, as long as they include the required income and withholding information. Additionally, taxpayers may use Form RPD-41072 for annual summary and reconciliation, helping ensure that the amounts withheld match the total tax reported and paid to the state.

Common mistakes

Filling out tax forms can sometimes feel like trying to navigate a maze in the dark. This is especially true when it comes to filling out withholding forms for New Mexico. To make this task a bit lighter, let’s illuminate the common mistakes people make on the New Mexico Withholding form so you can steer clear of them:

Not updating form for post-2020 changes: With the Federal Form W-4 changes in 2020, which removed allowances, many employees neglect to review and adjust their New Mexico withholding setup accordingly. New Mexico's state withholding tables should be used, regardless of the W-4 version.
Employers failing to communicate changes: Since New Mexico withholding tax has undergone modifications—like no longer adjusting due to the number of allowances—it remains crucial for employers to inform their team. This helps employees understand potential increases in their withholding tax.
Overlooking exempt income: Employees with income exempt from New Mexico tax, such as Native Americans working on their tribal land or military members with active-duty pay, mistakenly have tax withheld when indicating "exempt" status could avoid it.
Not specifying New Mexico on the W-4: When a dual-purpose Federal Form W-4 is used for state withholding, failing to write "For New Mexico State Withholding Only" across the top can cause confusion and improper filing.
Incorrect filing status or paycheck frequency: Misinterpreting the paycheck frequency or filing status on the withholding tables can lead to incorrect withholding amounts. This misstep can affect tax liabilities and refunds at the end of the year.
Additional withholding not considered: Some employees forget to request additional withholding amounts for New Mexico, even though they might benefit from opting for additional federal withholdings to avoid potential tax liabilities.
Inadequate withholding for supplemental wages: Employers not using the appropriate method to withhold taxes from supplemental wages, such as bonuses or overtime, can result in employees either overpaying or underpaying their state taxes.
Failure to use updated tax tables: Relying on outdated withholding tax tables can lead to incorrect withholdings. The withholding tables provided in the latest New Mexico publication should be used to ensure accuracy.
Error in annual reconciliation process: Not reconciling the total amounts of withheld state tax on withholding statements with the total tax withheld and paid to New Mexico might lead to complications. Filing amended returns when necessary and ensuring accurate totals are critical steps often overlooked.

Understanding and avoiding these mistakes can lead to a smoother experience with New Mexico's withholding tax. It ensures compliance, minimizes the likelihood of unexpected tax liabilities, and helps manage financial planning more effectively.

Documents used along the form

Accurate and timely tax documentation is vital for efficient payroll management and compliance with state regulations. In addition to the New Mexico Withholding Tax form (FYI-104), businesses often need to prepare and maintain several other documents to ensure accurate reporting and withholding of taxes. Each of these documents plays a unique role in the payroll and tax reporting process.

Federal Form W-4: Used by employees to determine the amount of federal income tax to withhold from their wages. Although New Mexico does not have a state-specific W-4, employees can use the federal form for New Mexico state withholding purposes by indicating "For New Mexico State Withholding Only" on the form.
Form CRS-1: Before the changes in July 2021, this form was used for reporting New Mexico withholding tax along with gross receipts and compensating tax. It highlights the integration of state tax reporting processes before recent adjustments.
TRD-41414, Wage Withholding Tax Return: This form is used after July 1, 2021, for reporting taxes withheld from employee wages. It's crucial for businesses adjusting to the most current reporting requirements.
TRD-41409, Non-Wage Withholding Tax Return: This form is specifically for reporting withholding taxes from non-wage sources, such as gambling winnings, pensions, and annuities. It applies to both before and after the July 1, 2021 changes.
Form ACD-31015, Business Tax Registration and Update Form: Necessary for businesses to register for tax withholding, update their business information, or cancel their New Mexico Business Tax Identification Number.
Form PIT-ES, Estimated Tax Payment Voucher: Used by individuals, including those who are self-employed, to make estimated tax payments. While not directly related to payroll withholding, it is relevant for self-employed individuals and business owners.
Form RPD-41072, Annual Summary of Withholding Tax: Though not mandatory, this form helps businesses reconcile their withholding amounts at the end of the year, ensuring that the amounts withheld match what was actually paid.
Form RPD-41071, Application for Refund: Used in conjunction with RPD-41072 if a business discovers it has overpaid on its withholding and seeks a refund.
Annual Withholding Statements: These include forms like W-2, W-2G, 1099-R, and others, which businesses are required to file for each employee or contractor to whom they've paid wages or other earnings subject to state withholding.

Understanding and managing these forms effectively ensures businesses remain compliant with New Mexico's tax laws and regulations while minimizing potential legal and financial penalties. Utilizing these documents correctly plays a crucial role in the smooth operation of payroll processing and tax reporting for any business operating within New Mexico.

Similar forms

The New Mexico Withholding Tax form is similar to the Federal Form W-4 in several key aspects. Both are designed to instruct employers on how much tax to withhold from an employee's paycheck. Federal Form W-4 is used for federal income tax withholding, while the New Mexico form pertains to state income tax. The main function of these forms is to ensure that employees have the correct amount of tax withheld to cover their estimated tax liability for the year. This similarity extends to how the forms consider the filing status and income levels of the employee, though the specific details and tax rates will naturally differ between federal and state levels. Employees use both forms to claim allowances or exemptions and may also specify an additional dollar amount to withhold.

Another document the New Mexico Withholding Tax form aligns with is the employer's quarterly federal tax return, IRS Form 941. IRS Form 941 is used by employers to report income taxes, social security tax, or Medicare tax withheld from employees' paychecks. Additionally, it reports the employer's portion of social security or Medicare tax. The comparison lies in the purpose of reporting and paying withheld taxes to the respective tax authorities. While IRS Form 941 deals with federal withholdings, the function mirrors that of the processes outlined for New Mexico's withholding on a state level, focusing on ensuring that employers accurately report and submit withheld amounts on behalf of their employees.

Additionally, the New Mexico Withholding Tax form has parallels with IRS Form W-2. Form W-2 is used by employers to report an employee's annual earnings and the taxes withheld from their paycheck to the Internal Revenue Service. Both forms are critical at year-end to ensure employees can accurately report income and pay the correct amount of taxes. Where the New Mexico Withholding Tax form serves as a guide for how much state tax should be withheld from an employee’s paycheck through the year, Form W-2 summarizes the total income earned and the total state, federal, and other taxes withheld. This makes it essential for filing accurate annual tax returns, showcasing the intertwined nature of payroll documentation between state and federal tax responsibilities.

Dos and Don'ts

When dealing with the New Mexico Withholding Tax Form, it's important to ensure accuracy and compliance with state guidelines. Here are key dos and don'ts to consider:

Do:

Use the latest Federal Form W-4 for New Mexico withholding purposes. Mark it clearly with "For New Mexico State Withholding Only" to distinguish it for state tax purposes.
Include additional withholding amounts if desired. If an employee wishes to have extra money withheld from their paycheck, they can request this on their New Mexico withholding W-4 form.
Keep updated on changes to withholding requirements. Since tax laws and withholding requirements can change, regularly checking the New Mexico Taxation and Revenue Department website for updates is crucial.
Ensure correct filing for exempt income. If an employee's income is exempt from New Mexico tax, such as certain Native Americans or military members, make sure this is correctly indicated on the withholding form to avoid unnecessary withholdings.

Don't:

Forget to adjust withholdings based on the state withholding tables. The withholding tables are essential for determining the correct amount to withhold from each paycheck.
Overlook special withholding situations. Certain incomes, like gambling winnings, have specific withholding requirements. Ensure these are followed to stay compliant.
Ignore the need for employees to review their withholdings. Encourage employees to check their withholding amounts regularly, especially after major life changes, to ensure they're not under or over-withholding.
Miss the filing deadlines. Submitting withholding tax forms and payments after the due date can lead to penalties and interest charges.

Misconceptions

When it comes to understanding the ins and outs of the New Mexico Withholding Tax, many people find themselves tangled in misconceptions. Here are seven common ones, unpacked and explained for clarity.

Misconception 1: You must use a special state form for New Mexico withholding.

Contrary to this belief, employees can use any version of the Federal Form W-4 for New Mexico withholding purposes. They simply need to mark it clearly for state withholding use.

Misconception 2: Changes in federal withholding methods don't affect state withholding in New Mexico.

Actually, updates to federal withholding guidelines directly impact how withholding is calculated in New Mexico—the state's withholding tables now align with federal changes.

Misconception 3: The number of allowances claimed doesn't matter anymore.

Even though allowances are less central after the federal tax law changes in 2020, correctly determining the number of allowances (for forms pre-2020) still influences your New Mexico withholding.

Misconception 4: Non-resident employees always have New Mexico income tax withheld.

Employers aren't required to withhold New Mexico income tax for nonresident employees working in the state for 15 days or fewer within a calendar year.

Misconception 5: All types of income are subject to the same withholding rules.

Different rules apply for withholding on gambling winnings, pensions, and regular wages. For example, gambling establishments must withhold at a rate of 6% for certain winnings.

Misconception 6: You don’t have to report and pay withholding taxes if your business stops operating.

Even if a business ceases operations, there's still a requirement to report and pay any outstanding withholding taxes—businesses must formally notify the Taxation and Revenue Department to cancel their tax ID number.

Misconception 7: Supplementary wages and bonuses are taxed at the same rate as regular wages.

For irregular or supplemental wages, withholding might need to be calculated differently, either using the percentage method tables provided or by adhering to special calculations for bonuses and similar types of income.

Understanding these aspects can help both employers and employees navigate New Mexico's withholding requirements more effectively, ensuring compliance and reducing the likelihood of surprises come tax time.

Key takeaways

Understanding the New Mexico Withholding Tax form is critical for both employers and employees to ensure accurate withholding and compliance with state tax laws. Here are key takeaways:

New Mexico uses the Federal Form W-4 for state withholding purposes, but it does not adjust withholding based on pre-2020 allowances.
Employers must withhold New Mexico income tax from wages if they withhold federal income tax, with specific considerations for nonresident and exempt-status employees.
The amount to withhold is based on the New Mexico State Wage Withholding Tax Tables, which are updated to reflect changes in federal and state law.
To determine the correct amount of New Mexico state tax to withhold, employers should refer to the tax table corresponding to the employee’s payroll period and filing status.
Employers are responsible for reporting and paying withheld taxes using the appropriate state forms, now separate from gross receipts and compensating tax reporting as of July 1, 2021.
It is possible for employees to request additional withholding directly on their New Mexico W-4 for state purposes.
Withholding on gambling winnings requires operators to withhold 6% from winnings, reporting and paying these amounts using specific state forms.
Annual withholding statements must be filed for each person from whose wages state tax has been withheld, with New Mexico accepting certain federal forms for reporting.
Employers must provide their employees with information on state assistance for low-income New Mexicans in both English and Spanish, as part of their annual reporting obligations.

Employers and employees should closely review these requirements to ensure compliance and avoid potential penalties. Accurate withholding benefits all parties by aligning the withheld tax amounts more closely with the taxpayer's actual tax liability for the year.

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