New Mexico return changes for preparers

The department’s HB 252 release said New Mexico would move to six brackets with rates from 1.5% to 5.9%. The 2025 rate table applies 4.9% from $100,000 and 5.9% above $210,000 for single filers, and above $315,000 for joint filers.

Below $100,000 the 2025 table gives tax amounts rather than rates, so use the table or software rather than a hand calculation.

• The school supplies deduction is $1,000 for 2025, up from $500 for 2024.
• The $3,000 medical care exemption for clients 65 or older needs unreimbursed medical expenses of $28,000 or more in 2025.
• The social security exemption applies only at AGI of $100,000 or less (single), $75,000 (separate) or $150,000 (joint, head of household or surviving spouse).
• Armed forces retirement pay remains exempt up to $30,000.

A pass-through entity can elect each year, on its return, to pay tax at the entity level. The department says the top personal and corporate rates are both 5.9% and entity-level tax is charged at the higher of the two.