New Mexico payroll tax withholding requirements for employers

New Mexico requires employers to withhold income tax from employee paychecks and to pay employer unemployment taxes. There are no local income taxes, and employers with three or more active New Mexico employees also owe a Workers' Compensation Fee.

What are my state payroll tax obligations?

New Mexico requires employers to withhold income tax from employees' paychecks, in addition to employer-paid unemployment taxes. New Mexico does not have any reciprocal agreements with other states, and there are no local income taxes imposed in New Mexico.

Note: employers with three or more active New Mexico employees are required to pay a Workers' Compensation Fee.

How do I register as an employer?

New Mexico employers need to register with both of the following agencies.

 
1. The Department of Taxation and Revenue - for withholding state income taxes from your employees' wages. Employers can register online using the New Mexico Taxation and Revenue Department Taxpayer Access Point.
 
2. The New Mexico Department of Workforce Solutions - for employer unemployment taxes. Register electronically using their online portal.

What are the payroll tax filing requirements?

How to file and pay electronically

 
• Income tax withholding and the Workers' Compensation Fee: file and remit payment electronically using the New Mexico Taxation and Revenue Department Taxpayer Access Point online system. The CRS-1 can be filed there as well.
 
• Unemployment taxes: file the ES-903A online using New Mexico's Unemployment Insurance Tax System.

Where can I find more info?

 
• The Department of Taxation and Revenue, for more information about state income tax withholdings. Visit the Wage Withholding Tax page for additional details.
 
• The New Mexico Department of Workforce Solutions, for more information about unemployment insurance taxes. An Employer Handbook is available for additional guidelines about unemployment insurance taxes.

Frequently asked questions

What are New Mexico's state payroll tax obligations?

New Mexico requires employers to withhold income tax from employees' paychecks in addition to paying employer-funded unemployment taxes. New Mexico has no reciprocal agreements with other states and imposes no local income taxes.

Does New Mexico charge a workers' compensation fee?

Yes, for larger employers. Employers with three or more active New Mexico employees are required to pay a Workers' Compensation Fee, reported on Form WC-1.

How do I register as an employer in New Mexico?

Register with two agencies: the Department of Taxation and Revenue for withholding state income taxes, using the Taxpayer Access Point, and the New Mexico Department of Workforce Solutions for employer unemployment taxes, using their online portal.

Which New Mexico payroll tax forms do employers file?

Employers file the CRS-1 Combined Report Form on a monthly, quarterly or annual basis, the RPD-41072 Annual Withholding Form, the WC-1 Workers' Compensation Fee Form quarterly, and Form ES-903A, the Employer's Quarterly Wage and Contribution Form, for unemployment taxes.

When are New Mexico payroll tax filings due?

The RPD-41072 Annual Withholding Form is due on or before the last day of February each year. The WC-1 and ES-903A are both due quarterly on or before the last day of the month following the close of a calendar quarter: April 30, July 31, October 31 and January 31.