New Mexico Payroll Instructions

New Mexico has state income tax withholding. Withholding tax formulas changed slightly in 2023 (they have changed in 28 of the past 33 years). Payroll withholding amounts are calculated from three 'step' tables that are similar to the US federal tax tables.

Oddly, New Mexico tax tables have 9 steps, but 5 of them are at the same percentage rate. The extra lines aren't necessary, but we type them in each year just so users won't be confused by the difference. In 2023 we also switched from weekly to annual tables. Goldenseal will adjust that for your actual pay periods.

HINT: TurtleSoft provides free annual updates for US federal and New Mexico tax withholding rates. For instructions on importing them into Goldenseal payroll software, click here.

New Mexico State Withholding Instructions

To enter withholding information for an employee in your Goldenseal company file, follow these steps:

  1. Open the Payroll tab on the left, and choose Employees.
  2. Locate the employee's record.
  3. Click the Payroll Setup button.
  4. Enter the employee's marital status into the Marital Status field (see note below).
  5. Enter the number of federal dependents into the Federal Exemptions field.
  6. Enter the number of New Mexico dependents into the State Exemptions field.
  7. Enter a New Mexico Tax Package into the Tax Package field, based on the employee’s W4 form. Choose Old W4 for pre-2020 forms. Choose New W4 Step2- if they did not check the box in step 2 of the new form. Choose Step2+ if they did check it. HINT: If you don't see New Mexico packages in the list, you'll need to import 2022 tax info first.
  8. Click OK.

New Mexico State Unemployment Tax Instructions

New Mexico state unemployment tax applies to the first $30,400 in wages for each employee (2022 wage base, a $1700 increase from the previous year). For new businesses, the starting SUTA rate is 2%. After the fourth year, employer withholding rates for SUTA range between .03% and 5.4% depending on experience rating (which is based on total payroll and past UI claims).

To enter your New Mexico SUTA tax rate into Goldenseal payroll software program, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Items.
  2. You'll see a list of Tax Items. Open the New Mexico SUTA item, and open it. HINT: If you don't see New Mexico SUTA in the list, you'll need to import your state's payroll info first.
  3. Enter the percentage rate that you pay into the percentage field to the right of Calculation method.
  4. If the cutoff amount has changed, enter it into the dollar field to the right of First Adjustment

New Mexico Marital Status

Enter the marital status of each employee account into their Marital Status popup field:

State Tax Contacts

Website

Official State Lawn Ornament

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