New Mexico LLC Taxes: The Complete Filing Guide (2025)

New Mexico LLC Tax Basics

Navigating your New Mexico LLC tax obligations doesn’t have to be complicated. We’ll walk you through the essentials of pass-through taxation, explain New Mexico’s specific requirements, and highlight strategies to stay compliant and organized. This guide covers everything from federal income taxes to city-specific requirements and filing deadlines.

Use the links below to jump directly to the section you need:

• New Mexico LLC Taxes at a Glance
• Understanding LLC Taxation Basics
• Federal Tax Obligations
• New Mexico State Taxes
• Local Tax Considerations
• Tax Calendar and Filing Tips
• Tax Strategies for New Mexico LLCs
• Forms and Resources

New Mexico LLC Taxes at a Glance

Tax Type	Rate	Filing Deadline	Forms Required
Federal Income Tax	10-37% (personal brackets)	April 15, 2025	Form 1040 + Schedule C or Schedule E/K-1
Self-Employment Tax	15.3%	April 15, 2025	Schedule SE
New Mexico Personal Income Tax	1.7%–5.9%	April 15, 2025	Form PIT-1
New Mexico Gross Receipts Tax	5.125%–10.8125%	Monthly, quarterly or semiannually	Form TRD-41413
New Mexico Pass-Through Entity Tax	5.9%	March 15, 2025	Form PTE
New Mexico Corporate Income Tax	5.9%	April 15, 2025	Form CIT-1
Federal Payroll Taxes (If Employees)	7.65% employer + 7.65% employee (FICA)	Quarterly (April 30, July 31, October 31, January 31)	Form 941
New Mexico Unemployment Tax (If Employees)	0.33%–5.4% (new employers: 1.00%–1.18%)	Quarterly	Form ES-903A
Federal Unemployment (FUTA)	6% on first $7,000 per employee (0.6% after credits)	January 31, 2026 (annual)	Form 940

Understanding LLC Taxation Basics

How New Mexico LLCs Are Taxed By Default

Your New Mexico LLC doesn’t pay taxes itself. Instead, profits flow through to you and your members, who report them on personal tax returns. This is called pass-through taxation.

Here’s how it works:

1. Your LLC earns income from business activities
2. The LLC itself files no tax return (unless you elect otherwise)
3. Profits “pass through” to members based on ownership percentage
4. Each member reports their share on their personal tax return
5. Members pay tax at their individual income tax rates

What this means for you: Unlike corporations, your business profits are only taxed once, which typically saves money.

Tax Classification Options

While pass-through taxation is the default, your New Mexico LLC can choose alternative tax treatments:

Default LLC Tax Status:

• Single-member LLC: Taxed as a sole proprietorship
• Multi-member LLC: Taxed as a partnership

Optional Tax Classifications:

• S Corporation: Can reduce self-employment taxes by paying “reasonable salaries”
• C Corporation: LLC pays corporate tax on profits, members pay personal tax on distributions (creates double taxation)

New Mexico Pass-Through Entity Tax Option:

• Optional tax that allows LLCs taxed as partnerships or S Corps to pay tax at the entity level
• Can help overcome the $10,000 SALT deduction limitation
• Election must be renewed annually

Not sure which tax classification is right for your business? Schedule a free consultation with 1-800Accountant.

Federal Tax Obligations

Income Tax

As a New Mexico LLC owner, you’ll report your share of business profits on your personal tax return using:

• Form 1040 + Schedule C (single-member LLCs)
• Form 1040 + Schedule E + Schedule K-1 (multi-member LLCs)

Federal income tax rates range from 10% to 37% based on your tax bracket (actual brackets will depend on inflation adjustments and any tax law changes).

Simply Put: Whatever money your business makes (after expenses) gets added to your personal tax return, just like income from a job.

Self-Employment Tax

LLC members actively involved in the business must pay self-employment tax of 15.3% (covering Social Security and Medicare) on their share of LLC profits.

Key points:

• Applies to net earnings of $400 or more
• Calculated on Schedule SE
• You can deduct 50% of the self-employment tax as an “above-the-line” deduction, which lowers your adjusted gross income

What happens if I miss this payment? The IRS charges penalties of 0.5% per month plus interest. However, first-time mistakes can often qualify for penalty abatement if you have a clean compliance history.

Employment Taxes

If your LLC has employees, you must:

• Withhold federal income tax
• Pay and withhold FICA taxes (7.65% each for employer and employee)
• Pay federal unemployment tax (FUTA)
• File quarterly employment tax returns (Form 941)
• Provide W-2 forms annually

Estimated completion time: 2-3 hours per quarter (significantly less with payroll software or professional help)

Estimated Tax Payments

Because no tax is withheld from your LLC profits, you’ll likely need to make quarterly estimated tax payments using Form 1040-ES. These payments cover both income and self-employment taxes on your share of the business income. Missing deadlines or underpaying can lead to IRS penalties, even if you pay in full later.

Working with an accountant can help ensure accurate calculations, on-time payments, and a smarter overall tax strategy.

Key deadlines:

• April 15
• June 16
• September 15
• January 15

Pro Tip: Set calendar reminders 15 days before each deadline. This gives you time to prepare without the last-minute rush that leads to mistakes.

New Mexico State Taxes

New Mexico Income Tax

New Mexico has a graduated personal income tax rate ranging from 1.7% to 5.9% that applies to your LLC’s profits on your personal return.

Filing requirements:

• Use New Mexico Form PIT-1
• Due April 15, 2025
• New Mexico follows federal adjusted gross income as a starting point

Bottom Line: For every $1,000 your LLC earns, you can expect to pay between $17 and $59 in New Mexico state income tax (in addition to federal taxes).

New Mexico Pass-Through Entity Tax

This optional tax can benefit many New Mexico LLC owners:

• Tax rate: 5.9% 
• Paid by your LLC instead of individual members
• Members receive a tax credit on their personal returns
• Helps bypass the $10,000 SALT deduction limitation
• Must elect by filing Form PTE by March 15, 2025
• Must be elected annually (does not carry over to future tax years)

Real Savings Example: For an LLC with $200,000 in profits, the Pass-Through Entity Tax could save owners up to $9,000 in federal taxes by working around the SALT deduction cap.

New Mexico Corporate Income and Franchise Tax

If your New Mexico LLC elects to be taxed as a c corp, it must pay the state’s 5.9% corporate income tax. 

• File using Form CIT-1
• Due April 15, 2025 
• $50 flat additional annual franchise must be included
• Different rates apply for years prior to 2025

New Mexico Gross Receipts Tax

Instead of imposing a traditional sales tax, New Mexico imposes a gross receipts tax (GRT) on most sales of goods and services made by your LLC in the state.

• Applies to most in-state sales of products and services
• Total tax rate ranges from 5.125% to 10.8125%, depending on business location
• Register for a New Mexico business tax ID (NMBTID)
• File using New Mexico Form TRD-41413
• File and pay monthly, quarterly, or semiannually based on revenue
• Returns due on the 25th of the month following your reporting period

Payroll Taxes 

If you have employees in New Mexico, you will be responsible for two types of payroll taxes. 

Unemployment Insurance (UI) Tax 

• Register through the New Mexico Department of Workforce Solutions
• Rate is 1%–1.18% for new employers (0.33%–5.4% afterwards)
• File online using New Mexico Form ES-903A 
• Due quarterly

Withholding Tax 

• Register for a withholding account through the New Mexico Taxation and Revenue Department
• Withhold based on employee state tax tables
• Due monthly, quarterly, or semiannually based on amount withheld
• File using New Mexico Form TRD-41414

Calendar Alert: New Mexico requires separate accounts, filings, and deadlines for UI and withholding tax, so make sure to set reminders for both to avoid missed payments or penalties.

Local Tax Considerations

Local Option Gross Receipts Taxes

In New Mexico, counties and municipalities can impose their own gross receipts taxes on top of the state’s base rate.

Examples of total gross receipts tax rates (state + local):

• Albuquerque: 7.625%
• Santa Fe: 8.1875%
• Las Cruces: 8.065%
• Roswell: 7.8958%
• Over 100 other New Mexico jurisdictions

Filing requirements:

• No separate city or county filings 
• Local gross receipts taxes are reported and paid alongside state gross receipts tax
• Must allocate gross receipts by jurisdiction if operating in multiple locations

Note: Use the New Mexico Gross Receipts Tax Rate Map to verify the correct rate for each business location.

Property Taxes

If your LLC owns real property in New Mexico:

• Rates vary by locality
• Assessed annually
• May qualify for various exemptions based on business type
• Personal property tax may apply to business equipment

Tax Calendar and Filing Tips

Key Deadlines for New Mexico LLCs

January:

• January 15: Final estimated tax payment for previous year
• January 31: Issue W-2s/1099s to employees/contractors
• January 31: Fourth quarter payroll tax payment due (state and federal)

March:

• March 15: New Mexico Form PTE election due

April:

• April 15: Personal tax returns due
• April 15: Federal income and self-employment tax returns due
• April 15: First quarter estimated tax payment due 
• April 30: First quarter payroll tax payment due (state and federal)

June: 

• June 16: Second quarter estimated tax due 

July: 

• July 31: Second quarter payroll tax payment due (state and federal)

September:

• September 15: Third quarter estimated tax payment due

October:

• October 31: Third quarter payroll tax payment due (state and federal)

Record-Keeping Checklist

Keep these records for at least 7 years:

• Business income records (invoices, receipts)
• Expense receipts and documentation
• Bank and credit card statements
• Asset purchase and improvement records
• Vehicle mileage logs
• Home office documentation
• Payroll records
• Previous tax returns

Tax Strategies for New Mexico LLCs

S Corporation Election Benefits

Converting your LLC to an S Corporation for tax purposes can save on self-employment taxes:

1. File Form 2553 with the IRS
2. Pay yourself a “reasonable salary” subject to employment taxes
3. Take remaining profits as distributions exempt from self-employment tax

Example: An LLC making $100,000 in profit pays 15.3% self-employment tax on the entire amount. As an S Corp, if $60,000 is a reasonable salary and $40,000 is taken as distributions, only the $60,000 is subject to employment taxes.

Potential Savings: In this example, you’d save about $6,120 in self-employment taxes.

Pass-Through Entity Tax Election

Consider electing New Mexico’s Pass-Through Entity Tax if:

• You’re affected by the $10,000 SALT deduction cap
• Your LLC has significant net income
• All members agree to the election

Business Expense Deductions

Common deductions New Mexico LLC owners often overlook:

• Home office deduction
• Business mileage (70¢ per mile for 2025)
• Health insurance premiums
• Retirement plan contributions
• Professional development expenses
• Business meals (50% deductible)

Forms and Resources

Federal Tax Forms

• Schedule C: Profit or Loss From Business (sole proprietors)
• Form 1065: U.S. Return of Partnership Income
• Schedule K-1: Partner’s Share of Income, Deductions, Credits
• Form 1120-S: U.S. Income Tax Return for an S Corporation
• Form 2553: Election by a Small Business Corporation (S Corp)
• Form 8832: Entity Classification Election

New Mexico Tax Forms

• Form PIT-1: New Mexico Personal Income Tax Return
• Form PTE: New Mexico Pass-Through Entity Tax Return
• Form TRD-41413:New Mexico Gross Receipts Tax Return
• Form CIT-1: New Mexico Corporate Income Tax Return

Helpful Resources

• New Mexico Taxation and Revenue Department
• New Mexico Economic Development Department
• Internal Revenue Service
• New Mexico Secretary of State