Every individual who must file a New Mexico personal income tax return must pay estimated tax under Section 7-2-12.2 NMSA 1978. You can meet this requirement through withholding or estimated tax payments. If you owe state income tax, you must pay estimated tax when the tax shown on the return for the year is more than the amount withheld under the Withholding Tax Act by at least $500. To make this calculation do not include tax withheld under the provisions of the Oil and Gas Withholding Tax Act (Sections 7-3A-1 through 7-3A-9 NMSA 1978).
If the difference between the tax shown on the return and withholding tax paid is more than $500, the Department determines whether the required annual payment was made and computes penalty on underpayment. The required annual payment is either 90% of the current year’s tax liability or 100% of the prior year’s tax liability. You must have filed a full-year New Mexico personal income tax return in the previous year to be eligible for the second option.
For calendar-year filers who owe estimated tax payments, estimated tax payments are due by April 15, June 15, and September 15 of the tax year, and by January 15 of the following year. If a due date is a Saturday, Sunday, a State or national legal holiday, the payment is timely when the postmark bears the next business day’s date. Delivery by a private delivery service is timely if the date on the delivery service’s records is on or before the required mailing date.
For additional information, refer to FYI 320: Personal Income Tax Estimated Payments.