What You Need to Know
- Those whose income is less than $100,000 (single) or $150,000 (married, filing jointly) will no longer have to pay state taxes on benefits.
New Mexico on Tuesday joined a growing number of states that have reduced or eliminated taxes on Social Security benefits.
Gov. Michelle Lujan Grisham, a Democrat, signed House Bill 163, exempting individuals with less than $100,000 a year of income and couples earning less than $150,000 from state taxes on the government benefit.
The cut takes effect in tax year 2022.
Currently, New Mexico includes all Social Security benefits in the taxable income base, though the state provides a deduction that reduces the taxability of all retirement income. This has been in effect since 1990.
The new tax cut will save older adults in the state more than $84 million next year, according to a statement released by the governor’s office.