Retirement taxes by state
How New Mexico taxes retirement income in 2026
New Mexico's income tax rates run from 1.5% to 5.9%. Here's how New Mexico treats Social Security, retirement-account withdrawals, pensions and Roth conversions in 2026 — and what that means in dollars: a retired couple, both 67, with $98,000 of income pays about $200 in New Mexico income tax.
Updated October 2026 · 2026 tax year
New Mexico at a glance
- Income tax from 1.5% to 5.9%.
- Social Security is exempt with income up to $100,000 ($150,000 joint).
- 40% of capital gains is excluded.
New Mexico retirement tax questions
Does New Mexico tax Social Security?
Social Security is exempt with income up to $100,000 ($150,000 joint).
Does New Mexico tax 401(k) and IRA withdrawals?
Yes, at the state's regular income tax rates. New Mexico has no special exclusion for retirement-account withdrawals.
Does New Mexico tax pensions?
Yes, at the state's regular income tax rates. New Mexico has no special pension exclusion.
Does New Mexico tax Roth conversions?
Yes. A Roth conversion counts as income in New Mexico in the year you convert, taxed at the state's regular rates. Qualified Roth withdrawals later aren't taxed.
What is New Mexico's income tax rate in 2026?
New Mexico's income tax rates run from 1.5% to 5.9%.
What retirees actually pay in New Mexico: three examples
Calculated with Retirology's tax engine under 2026 law, using each state's standard deduction, its retirement breaks and the 2026 federal rules for how much Social Security is taxable. For the retired couple, New Mexico ranks 30th lowest of the 50 states and DC.
| Household | Total income | New Mexico tax | Share |
|---|---|---|---|
| Retired couple, both 67 $48,000 of Social Security, $40,000 drawn from IRAs and 401(k)s, and $10,000 of qualified dividends | $98,000 | $200 | 0.2% |
| Single retiree, 70 $30,000 of Social Security, a $25,000 pension and $15,000 of IRA withdrawals | $70,000 | $665 | 0.9% |
| Early-retired couple, both 56, converting to Roth A $60,000 Roth conversion and $20,000 of long-term gains and qualified dividends, living on savings | $80,000 | $1,300 | 1.6% |
State income tax only — before local taxes, property tax relief and credits not listed above. Federal income tax is extra and the same in every state.
New Mexico income tax brackets (2026)
Rates apply to New Mexico taxable income, after the state's deductions and the retirement breaks above. Brackets are adjusted for inflation each year.
| Single | Rate | Married filing jointly | Rate |
|---|---|---|---|
| Up to $5,500 | 1.5% | Up to $8,000 | 1.5% |
| $5,500 – $16,500 | 3.2% | $8,000 – $25,000 | 3.2% |
| $16,500 – $33,500 | 4.3% | $25,000 – $50,000 | 4.3% |
| $33,500 – $66,500 | 4.7% | $50,000 – $100,000 | 4.7% |
| $66,500 – $210,000 | 4.9% | $100,000 – $315,000 | 4.9% |
| Over $210,000 | 5.9% | Over $315,000 | 5.9% |
Details and limits
Social Security exempt below $100k AGI ($150k joint), taxable above. 40% of capital gains deducted. The small 65+ low-income exemption isn't modelled.
Sources
Rates and rules for the 2026 tax year, from Retirology's state tax data (reviewed October 2026):
This page explains state tax rules in general terms. It isn't tax advice — check your state's official instructions or a tax professional for your situation.