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New Mexico Withholding: What you need to know

The New Mexico income tax withholding law requires employers in the state to withhold the New Mexico tax from wages paid to all employees for service performed within the state and from wages of New Mexico residents for performing services outside the state. Because changes to the Internal Revenue Code are automatically adopted by New Mexico, compensation that is subject to federal withholding is also subject to state withholding. The definitions of employer, employee, and wages under New Mexico's law are also generally the same as for federal tax purposes. The amount that must be withheld each pay period may be determined using the information on the employee's federal Form W-4 and either the percentage method or the withholding tables provided by the Taxation and Revenue Department (TRD).
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An employer that withholds a portion of an employee's wages for payment of federal income tax must withhold state income tax. This includes employers of some agricultural workers. Employers are not required to withhold taxes on wages paid to nonresidents who work 15 or fewer days in New Mexico per year. Also exempt from withholding tax is income wholly earned by a Native American member of a New Mexico federally recognized Indian nation, tribe, or pueblo on the lands of the nation, tribe, or pueblo where he or she is enrolled and lives. The income earned from active duty military service is also exempt from withholding requirements. Clergy, domestic workers, and agricultural workers are exempt from withholding.
Employees. The federal Form W-4 is used in New Mexico to determine how many tax exemptions an employee is claiming.
Employers. Employers required to withhold taxes must file an Application for Registration, ...

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New Mexico Withholding Resources

Withholding Products

Taxation and Withholding Explained Webinar Recording
BLR Webinar: "Taxation and Withholding Explained: Compliance Tips for Multistate Employers""
Employment Taxes in Multiple States Webinar Recording
BLR Webinar: "Employment Taxes in Multiple States: Step-by-Step Calculation and Reporting Strategies""
Payroll Webinar Recording
BLR Webinar: "Payroll: How to Legally Handle Tax Levies and Garnishments""
IRS and ICE Audit Alert Webinar Recording
BLR Webinar: "IRS and ICE Audit Alert: How to Avoid and Manage Payroll and Recordkeeping Scrutiny""
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Claim Your Free Copy of Top 100 FLSA Overtime Q&As

We’ve compiled a list of the 100 most commonly asked questions we have received on the federal Fair Labor Standards Act (FLSA) overtime regulations.
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This report, "Top 100 FLSA Q&As", is designed to provide you with an examination of the federal FLSA overtime regulations in Q&A format, including valuable tips for bringing your workplace into compliance in an affordable manner.

At the end of the report, you will find a list of state resources on wage and hour issues. This report includes practical advice on topics such as:
  • FLSA Coverage: How FLSA regulations apply to all employers and any specific exemptions from the overtime requirements
  • Salary Level: Qualifying for exemptions and nonexempt employees
  • Deductions from Pay: Deducting for violations, disciplinary reasons, sick leave, or personal leave

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