S-corporations, limited liability companies and other pass-through entities doing business in the state must file a New Mexico income tax return. This requirement includes entities registered to do business in the state, transacting business in, into or from the state, or receiving any income from property or employment within the state.
The federal return that a pass-through entity is required or elects to file determines the New Mexico income tax return that the pass-through entity files. A pass-through entity may be required to file Form PTE, New Mexico Information Return for Pass-Through Entities, Form S-Corp, New Mexico Sub-Chapter S Corporate Income and Franchise Tax Return, or Form FID-1, New Mexico Fiduciary Income Tax Return.
Effective January 1, 2012, a pass-through entity means a personal services business or any other business association other than:
- a sole proprietorship, an estate or trust that does not distribute income to beneficiaries;
- a corporation, limited liability company, partnership or other entity not a sole proprietorship taxed as a corporation for federal income tax purposes for the tax year;
- a partnership that is organized as an investment partnership in which the partners’ income is derived solely from interest, dividends and sales of securities;
- a single-member limited liability company that is treated as a disregarded entity for federal income tax purposes; or
- a publicly-traded partnership as defined in Subsection(b) of Section 7704 of the Internal Revenue Code.
If your business is a pass-through entity, file in New Mexico on or before the due date of your federal return for the tax year. New Mexico also requires you to deduct and withhold tax from each non-resident owner's allocable share of net income. The tax withheld is required to be remitted to the Department annually. See Bulletin B-200.25 for a description of the new requirements.
The pass-through entity must file and pay the tax using form RPD-41367, Annual Withholding of Net Income From a Pass-Through Entity Detail Report. Form RPD-41367 can be filed and paid electronically on the Department's web file services page or through a third party software. If more than 50 payees, this report must be filed electronically.
Annual statements of withholding are not required to be submitted to the Department, but must be submitted to the taxpayer using form RPD-41359, Annual Statement of Pass-Through Entity Withholding, or 1099-Misc.
If the PTE has more than 50 New Mexico payees, and is unable to file electronically because a hardship exists and there is no reasonable access to the Internet in the taxpayer's community, the PTE may request Department approval to file by paper. The PTE may request approval by filing form RPD-41350, E-file Exception Request Form. The request must be received by the Department at least 30 days before the taxpayer's electronic report is due.
Taxation and Revenue Department
P.O. Box 25127
Santa Fe, NM 87504-5127
For assistance, call (505) 827-0825.
Or for tax return help, email us at CIT.TaxReturnHelp@state.nm.us.
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All Forms & Publications
FYI-350: Corporation Income Tax and Corporation Franchise Tax
Bulletin B-200.25 Withholding Tax on Owner's of a Pass-Through Entity