New Mexico

NM estate tax (federal pickup) phased out as of Jan 1, 2005

“New Mexico's Estate Tax is phased out due to federal tax law changes as of January 1, 2005.”

Note: Same page also states verbatim: 'Note: New Mexico does not impose an inheritance tax'.

New Mexico top income tax rate is 5.9% on income above $315,000 (MFJ, TY2025)

“For taxable years beginning on or after January 1, 2025, a tax is imposed upon the net income of every individual resident at the following rates: 1.5% to $8,000; 3.2% from $8,001 to $25,000; 4.3% from $25,001 to $50,000; 4.7% from $50,001 to $100,000; 4.9% from $100,001 to $315,000; and 5.9% above $315,000, for married individuals filing jointly.”

Note: NM uses federal AGI minus federal standard or itemized deductions (PIT-1 line 12) as the base.

New Mexico net capital gain deduction is the greater of min(net capital gain, $2,500) or 40% of up to $1M of NM business-sale gain (TY2025+)

“a deduction from net income in an amount equal to the greater of: (1) the taxpayer's net capital gain income for the taxable year... but not to exceed two thousand five hundred dollars ($2,500); or (2) forty percent of up to one million dollars ($1,000,000) of the taxpayer's net capital gain income from the sale of a business that is allocated or apportioned to New Mexico pursuant to Section 7-2-11 NMSA 1978”

Note: HB 252 gutted the prior 40% general exclusion for TY2025 ('Sections 5, 8, 10 and 32 through 37 of this act apply to taxable years beginning on or after January 1, 2025'). The $2,500 prong applies to ALL asset types (net capital gain takes the IRC 1222(11) definition per subsection C), not just publicly traded securities; it is de minimis for large-gain filers. The 40% prong survives only for up to $1M of gain from the sale of a New Mexico-apportioned business.

IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback

“In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.”

Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged.

NM taxes out-of-state muni bond interest; NM bonds exempt NMSA §7-2-2

“'base income' also includes interest received on a state or local bond; ... 'state or local bond' means a bond issued by a state other than New Mexico or by a local government other than one of New Mexico's political subdivisions, the interest from which is excluded from income for federal income tax purposes under Section 103 of the Internal Revenue Code, as that section may be amended or renumbered;”

Note: NMSA §7-2-2 (as amended by HB 368, 2023) adds 'state or local bond' interest to base income and defines the term to cover only NON-New Mexico bonds: out-of-state muni interest is taxable, NM state and local bond interest stays out of the base by definition.

NM taxes out-of-state muni bond interest; NM bonds exempt NMSA §7-2-2

“'base income' also includes interest received on a state or local bond; ... 'state or local bond' means a bond issued by a state other than New Mexico or by a local government other than one of New Mexico's political subdivisions, the interest from which is excluded from income for federal income tax purposes under Section 103 of the Internal Revenue Code, as that section may be amended or renumbered;”

Note: NMSA §7-2-2 (as amended by HB 368, 2023) adds 'state or local bond' interest to base income and defines the term to cover only NON-New Mexico bonds: out-of-state muni interest is taxable, NM state and local bond interest stays out of the base by definition.

New Mexico conforms to IRC §1400Z-2 QOZ gain deferral and exclusion

“A. "adjusted gross income" means adjusted gross income as defined in Section 62 of the Internal Revenue Code, as that section may be amended or renumbered; ... J. "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as amended;”

Note: NMSA §7-2-2 defines New Mexico income by reference to rolling federal AGI under IRC §62 (with §7-2-2(J) adopting the IRC 'as amended'), so §1400Z-2 QOZ deferral and exclusion flow through; no NM addback found. Confidence medium: conformity mechanism verified verbatim, QOZ-specific text does not exist in NM statute.

New Mexico conforms to IRC §1202 QSBS gain exclusion

“A. "adjusted gross income" means adjusted gross income as defined in Section 62 of the Internal Revenue Code, as that section may be amended or renumbered; ... J. "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as amended;”

Note: NMSA §7-2-2 defines New Mexico income by reference to rolling federal AGI under IRC §62 (with §7-2-2(J) adopting the IRC 'as amended'), so federally excluded §1202 QSBS gain never enters the NM base; no NM addback found. Confidence medium: conformity mechanism verified verbatim, QSBS-specific text does not exist in NM statute.

New Mexico taxes FNMA and FHLMC bond interest: NM base income starts from federal AGI, which includes FNMA/FHLMC interest; no NM subtraction is available for GSE interest lacking a federal bondholder preemption

“'adjusted gross income' means adjusted gross income as defined in Section 62 of the Internal Revenue Code, as that section may be amended or renumbered;”

Note: New Mexico base income starts from federal AGI. FNMA and FHLMC bond interest is INCLUDED in federal AGI (not IRC §103-excluded). NMSA §7-2-2 adds back IRC §103-excluded interest from other states but does not provide a separate exemption for GSE interest. No NM TRD named-entity publication found; confidence: medium.

New Mexico top income tax rate is 5.9% on income above $315,000 (MFJ, TY2025)

“For taxable years beginning on or after January 1, 2025, a tax is imposed upon the net income of every individual resident at the following rates: 1.5% to $8,000; 3.2% from $8,001 to $25,000; 4.3% from $25,001 to $50,000; 4.7% from $50,001 to $100,000; 4.9% from $100,001 to $315,000; and 5.9% above $315,000, for married individuals filing jointly.”

Note: NM uses federal AGI minus federal standard or itemized deductions (PIT-1 line 12) as the base.

U.S. Treasury interest exempt from New Mexico income tax: 31 U.S.C. §3124(a) prohibits state taxation of U.S. government obligations

“Stocks and obligations of the United States Government are exempt from taxation by a State or political subdivision of a State. The exemption applies to each form of taxation that would require the obligation, the interest on the obligation, or both, to be considered in computing a tax.”

Note: 31 U.S.C. §3124(a) preempts state income taxation of U.S. government obligations. Covers T-bills, T-notes, T-bonds, TIPS, and I-bonds. Most states allow a deduction or subtraction by statute cross-referencing this federal preemption.

FHLB and FFCB bond interest exempt from New Mexico income tax: federal enabling statutes mandate state tax exemption

“Any security issued under this chapter by a Federal home loan bank, including the stock thereof, shall be exempt from taxation, except taxes upon real estate, by any State, county, municipality, or local taxing authority.”

Note: 12 U.S.C. §1433 (FHLB) and 12 U.S.C. §2023 (FFCB/Farm Credit Act) both mandate state tax exemption for securities issued under their chapters. Contrasts with FNMA (12 U.S.C. §§1719(e), 1723a(c)) and FHLMC (12 U.S.C. §1455(a)) which have no bondholder exemption statute and whose interest is taxable by income-tax states.

Farm Credit Act: notes, bonds, debentures, and other obligations of Farm Credit Banks are instrumentalities of the United States exempt from all State, municipal, and local taxation

“The mortgages held by the Farm Credit Banks and the notes, bonds, debentures, and other obligations issued by the banks shall be considered and held to be instrumentalities of the United States and, as such, they and the income therefrom shall be exempt from all Federal, State, municipal, and local taxation, other than Federal income tax liability of the holder thereof under the Public Debt Act of 1941 (31 U.S.C. 3124).”

Note: 12 U.S.C. §2023 explicitly covers 'the income therefrom' (i.e., interest payments to bondholders), exempting it from all State and local taxation. The only carve-out is federal income tax on the holder. Parallel to 12 U.S.C. §1433 (FHLB Act), which exempts FHLB securities from state taxation. Together §1433 and §2023 mandate state and local tax exemption for both FHLB and FFCB bond interest. Shared across all jurisdictions: a single object reference satisfies buildCitationIndex() identity check.

IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback

“In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.”

Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged.

New Mexico is a community property state: property acquired by either spouse during marriage is community property (N.M. Stat. Ann. § 40-3-8)

“Property acquired by either or both spouses during marriage and that is not separate property is community property.”

Note: New Mexico is a community property state since statehood (1912). N.M. Stat. Ann. § 40-3-8 is the primary statute. Income from separate property is also treated as community property in NM (unlike most other community property states). Spouses may agree to change the character of property.

New Mexico top income tax rate is 5.9% on income above $315,000 (MFJ, TY2025)

“For taxable years beginning on or after January 1, 2025, a tax is imposed upon the net income of every individual resident at the following rates: 1.5% to $8,000; 3.2% from $8,001 to $25,000; 4.3% from $25,001 to $50,000; 4.7% from $50,001 to $100,000; 4.9% from $100,001 to $315,000; and 5.9% above $315,000, for married individuals filing jointly.”

Note: NM uses federal AGI minus federal standard or itemized deductions (PIT-1 line 12) as the base.

New Mexico conforms to the federal capital-loss base; treatment of an imported pre-residency section 1212 carryforward is a structural inference

“Personal income tax in New Mexico starts with the Federally Adjusted Gross Income (FAGI) from your federal return.”

Note: The New Mexico Taxation and Revenue Department states personal income tax starts with federal adjusted gross income, so the federal section 1212 capital-loss base carries through. No published guidance addresses the imported pre-residency carryforward; that piece stays a structural inference.