Does New Mexico Tax Social Security?
Short answer: yes, but many retirees pay nothing
New Mexico taxes Social Security benefits, but its income thresholds for exemption are generous enough that most retirees don’t pay.
Single filers with income up to $100,000 owe no state tax on Social Security; for joint filers, the threshold is $150,000.
- Whether you owe depends on your adjusted gross income and filing status, not just on living in New Mexico
- Most low- and middle-income retirees in New Mexico end up owing little or nothing on their Social Security specifically
- These thresholds are current for 2026 and are set by New Mexico law, which can change — verify before relying on any specific number, including this one
Other retirement income isn’t exempt
Social Security is partly exempt for many filers, but other retirement income generally isn’t. Pensions, 401(k) and IRA distributions, and investment income are subject to New Mexico’s state income tax like any other income.
New Mexico’s income tax rate
New Mexico has a graduated income tax with rates from 1.5% to 5.9%. Because state tax rates and brackets change from year to year, check the Tax Foundation’s current state income tax data before relying on any specific number, including this one.
Does New Mexico tax Social Security benefits?
What is New Mexico's income tax rate?
New Mexico has a graduated income tax with rates from 1.5% to 5.9%, which is the rate that applies once your Social Security income crosses the exemption thresholds described above.
Is other retirement income like pensions and 401(k) withdrawals taxed in New Mexico?
Generally yes — New Mexico taxes pensions, 401(k) and IRA distributions, and investment income at its regular state income tax rate, separately from the Social Security-specific rules above.
Where can I verify current New Mexico tax rules?
The figures above are sourced from Kiplinger’s state-by-state Social Security tax tracker, current as of 2026. For income tax rates generally, the Tax Foundation publishes current state-by-state data. Thresholds and rates change from year to year, so confirm current numbers before making a decision based on them.
Beyond taxes
Taxes are one factor in a retirement location decision, not the whole picture. Healthcare access, cost of living, climate, and proximity to family typically matter as much or more. If New Mexico otherwise fits what you’re looking for, its tax treatment of Social Security is worth weighing carefully alongside its income thresholds — just don’t let it be the only factor you weigh, and talk to a tax advisor about how your specific retirement income will be taxed.
This article is for educational purposes only and isn't legal, financial, or tax advice. See our Disclaimer for details.
