Data Source and Methodology
Primary source: New Mexico Taxation and Revenue Department — Personal Income Tax (PIT) Rates and PIT-1 Instructions (Tax Year 2024). See:
- New Mexico TRD, “Personal Income Tax,” PIT Rates and Forms (accessed 2024–2025). Link: https://www.tax.newmexico.gov/individuals/personal-income-tax/
- New Mexico PIT-1 Instructions (TY 2024) — tax rate tables and guidance.
All calculations strictly follow the formulas and data provided by this source.
Notes: Brackets used here represent the statutory marginal rates for 2024, including the 5.9% top bracket introduced in recent legislative updates. The estimator mode uses the 2024 federal standard deduction as a proxy because New Mexico generally conforms to federal standard/itemized deductions. Credits, exemptions, exclusions (e.g., Social Security adjustments), and special rules are not modeled.
The Formula Explained
Tax formulas in LaTeX format
For taxable income x and bracket cutoffs c_0 = 0 < c_1 < ... < c_n with rates r_1, ..., r_n:
(1) T(x) = \sum_{i=1}^{n} r_i \cdot \max\!\bigl(0,\; \min(x, c_i) - c_{i-1} \bigr)
Marginal rate m(x) is the r_k for the bracket where c_{k-1} < x \le c_k.
If estimating from gross pay G with pre-tax deductions P and deduction D (standard or itemized):
(2) \text{TaxableIncome} = \max(0,\; G - P - D)
Effective rate:
(3) \text{EffectiveRate} = \frac{T(x)}{x} \quad \text{for } x > 0
Glossary of Variables
-
- Filing status: Single, Married Filing Jointly (MFJ), Married Filing Separately (MFS), Head of Household (HOH).
- Taxable Income (x): Income after adjustments and deductions subject to NM PIT.
- Gross Pay (G): Total pre‑tax annual compensation.
- Pre‑tax Deductions (P): Amounts excluded before tax (401(k), HSA, FSA, cafeteria plan, etc.).
- Deduction (D): Standard deduction (2024: Single/MFS $14,600; MFJ $29,200; HOH $21,900) or itemized deductions.
- T(x): Total New Mexico state tax before credits.
- Marginal Rate: The tax rate that applies to your last dollar of taxable income.
- Effective Rate: T(x) divided by taxable income.
How It Works: A Step-by-Step Example
Scenario: Single filer, gross pay $85,000, pre‑tax deductions $12,000, standard deduction.
- Compute taxable income using (2): Taxable = max(0, 85,000 − 12,000 − 14,600) = 58,400.
- Apply 2024 NM Single brackets using (1):
- 1.7% on first $5,500 → $93.50
- 3.2% on next $5,500 (5,500–11,000) → $176.00
- 4.7% on next $5,000 (11,000–16,000) → $235.00
- 4.9% on remaining $42,400 (16,000–58,400) → $2,077.60
- Marginal rate: 4.9%. Effective rate: 2,582.10 / 58,400 ≈ 4.42%.
Per‑paycheck estimates divide total NM tax by your pay frequency (e.g., 26 for biweekly).
Frequently Asked Questions (FAQ)
Which tax year does the calculator support?
It uses New Mexico’s 2024 tax brackets. The estimation mode applies 2024 federal standard deductions by status as a proxy for NM conformity.
Does it include local income taxes?
No. New Mexico has a state personal income tax. Local sales and other taxes are separate and not included here.
How accurate is the “estimate from gross pay” mode?
It’s a high-quality approximation for many filers but does not model credits, exclusions (e.g., certain Social Security treatment), or complex adjustments. For precise results, use your NM taxable income or consult a professional.
Can I model itemized deductions?
Yes. Choose “Itemized deduction” and enter your total to replace the standard deduction in the taxable income estimate.
What is the difference between marginal and effective rates?
The marginal rate applies to your last dollar of taxable income. The effective rate is your total NM tax divided by your taxable income.
Is my data stored?
No. All calculations run locally in your browser. We don’t store or transmit your inputs.