Does New Mexico tax Social Security? Not up to $100,000 of AGI ($150,000 joint)
Not if federal AGI is $100,000 or less ($150,000 joint, and head of household). It is a cliff: one dollar over and every federally taxable dollar of benefits is back in New Mexico income. In our single example, crossing the line costs about $1,000 a year. Below the line, benefits can still cost a little: they count in the AGI that decides New Mexico's exemption of up to $8,000 for people 65 and older, which shrinks to zero between $18,000 and $28,500 of AGI ($30,000 and $51,000 joint).
The rule, in New Mexico's words
The 2025 instructions for line 25: “If your federal Adjusted Gross Income (AGI) does not exceed the maximum for your filing status, as listed in Table 2 (below), enter the amount of social security income included in your AGI.” Their second example shows the cliff: “No part of the taxpayer’s social security income qualifies for the social security income exemption because their AGI is over the $100,000 maximum for their filing status.” The law (House Bill 163, 2022) says AGI “shall not exceed” the limit, so exactly $100,000 still qualifies.
What Social Security adds to your New Mexico tax in 2026
Each row compares New Mexico's 2026 income tax with your Social Security and without it, for the same IRA or 401(k) withdrawals. The difference is what your benefits cost you in New Mexico tax, through every rule at once. Above $100,000 of AGI (single) or $150,000 (joint) the extra tax jumps by the whole New Mexico tax on the benefits. The small amounts at lower incomes come from the 65-and-older exemption, not from a tax on the benefits.
| IRA or 401(k) withdrawals | Federal AGI | New Mexico tax, 2026 | Same, without Social Security | Extra because of Social Security |
|---|---|---|---|---|
| $0 | $0 | $0 | $0 | $0 |
| $10,000 | $10,000 | $0 | $0 | $0 |
| $20,000 | $23,500 | $0 | $0 | $0 |
| $30,000 | $41,300 | $286 | $286 | $0 |
| $40,000 | $59,800 | $665 | $665 | $0 |
| $50,000 | $70,400 | $1,095 | $1,095 | $0 |
| $60,000 | $80,400 | $1,558 | $1,558 | $0 |
| $80,000 | $100,400 | $3,488 | $2,498 | $990 |
| $100,000 | $120,400 | $4,468 | $3,469 | $1,000 |
| $125,000 | $145,400 | $5,693 | $4,694 | $1,000 |
| $150,000 | $170,400 | $6,918 | $5,919 | $1,000 |
| IRA or 401(k) withdrawals | Federal AGI | New Mexico tax, 2026 | Same, without Social Security | Extra because of Social Security |
|---|---|---|---|---|
| $0 | $0 | $0 | $0 | $0 |
| $10,000 | $10,000 | $0 | $0 | $0 |
| $20,000 | $24,000 | $0 | $0 | $0 |
| $30,000 | $41,100 | $0 | $0 | $0 |
| $40,000 | $59,600 | $68 | $0 | $68 |
| $50,000 | $78,100 | $328 | $264 | $64 |
| $60,000 | $94,000 | $648 | $648 | $0 |
| $80,000 | $114,000 | $1,502 | $1,502 | $0 |
| $100,000 | $134,000 | $2,420 | $2,420 | $0 |
| $125,000 | $159,000 | $5,240 | $3,596 | $1,645 |
| $150,000 | $184,000 | $6,466 | $4,800 | $1,666 |
Computed with the same engine and figures as our eight-state tool: federal taxable Social Security from IRS Publication 915, the 2026 federal standard deduction including the extra amount at 65 and the senior deduction, and New Mexico's rules above. No other income, itemized deductions or credits.
Your numbers
Social Security disability benefits
The exemption covers all Social Security in federal AGI, and the IRS counts disability benefits as Social Security: “Social security benefits include monthly retirement, survivor, and disability benefits.” There is no age requirement for the Social Security exemption itself.
Pensions and IRA withdrawals
New Mexico taxes pensions and IRA withdrawals. Its rates run from 1.5% to 5.9%.
2027
The $100,000 / $150,000 limits are fixed in the law, not indexed; we know of no change for 2027.
The other states that tax Social Security
Colorado, Connecticut, Minnesota, Montana, Rhode Island, Utah, Vermont. All eight side by side are in the eight-state tool, and every state with its own instructions in the all-states tool. How much of your Social Security the federal return taxes is in our taxable Social Security calculator.
Rechecks and changes
- . First published.
Sources
- New Mexico Taxation and Revenue Department, 2025 PIT-ADJ instructions (lines 13 and 25)
- New Mexico House Bill 163 (2022), Section 7
- IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits
- Dollars Ahead, Retirement Tax by State (the eight-state tool and its test cases)
This page shows what published tax rules do to the example incomes. It is not tax, legal or financial advice. For a decision that matters, take your numbers to a professional licensed to advise you.