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Navigating New Mexico Payroll Taxes
New Mexico employers must comply with several state payroll tax requirements, including New Hire Reporting, state income tax withholding, and unemployment insurance (UI) reporting. These obligations are administered by the New Mexico Taxation and Revenue Department (TRD) and the New Mexico Department of Workforce Solutions (NMDWS) and apply to most employers with workers in the state.
This guide provides a comprehensive overview of New Mexico payroll tax filing requirements, covering New Hire Reporting, withholding Forms TRD-41414, TRD-41409, and TRD-41431, and unemployment insurance forms ES903B and ES903A, along with filing deadlines, reporting methods, and compliance considerations to help employers stay up to date and avoid penalties.
New Mexico New Hire Reporting
New Hire Reporting is a mandatory legal requirement for all employers doing business in New Mexico to report newly hired and rehired employees to the New Mexico New Hire Directory. This reporting supports child support enforcement, helps establish paternity, and ensures children receive the financial support they deserve.
Who must report
All employers and labor organizations doing business in the State of New Mexico must report the following:
- New Employees: All employees who reside or work in New Mexico to whom the employer anticipates paying earnings. Employees must be reported even if they work only one day and are terminated before the employer fulfills the reporting requirement.
- Rehired or Recalled Employees: Employers must report employees who return to work after 60 or more consecutive days of being laid off, furloughed, separated, granted leave without pay, or terminated. This includes teachers, seasonal workers, and any employee who remains on payroll during a break in service and returns after 60 days. Substitute teachers must be reported for the first day worked in each school year.
- Temporary Employees: Temporary agencies are responsible for reporting any employee hired for an assignment. Employees need to be reported only once and do not need to be re-reported each time they report to a new client.
- Independent Contractors: Employers and labor organizations must also report contractors who are required to complete a W-4 or equivalent form.
Multi-State Employers
Multi-state employers have two options:
- Report newly hired employees to each state where they work, following each state's specific regulations; or
- Select one state where employees work and electronically report all new hires to that single state.
Multi-state employers who designate New Mexico as their reporting state must use one of the approved electronic reporting methods listed below.
What to report
When reporting a new hire in New Mexico, the employer must provide:
- Employer Information: FEIN, employer name, and payroll processing address
- Employee Information: Full name, mailing address, Social Security Number (SSN), and date of hire
-
Optional: Employer phone and contact name, employee's state of hire, and date of birth
If you have more than one FEIN, use the same FEIN you use to report your quarterly wage information.
When to report
Employers must report newly hired or rehired employees within 20 calendar days of the date of hire or rehire. Employers who submit reports electronically must submit two monthly transmissions no more than 16 days apart.
How to report
1. Online — Electronic Reporting (Recommended):
- Report new hires through the New Mexico New Hire Directory, available 24 hours a day, 7 days a week.
- Receive printable confirmation of every report submitted.
- File transfer is also available via File Transfer Protocol (FTP) or by mailing data files on a diskette
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2. By Fax or Mail — Non-Electronic Reporting:
- Download and complete the New Hire Reporting Form and fax or mail it to the New Mexico New Hire Directory.
- You can also submit a printed list with all required information — minimum 10-point font with employer name, FEIN, and address at the top.
-
Alternatively, submit a W-4 form with the employer name, FEIN, address, and date of hire noted in any available
blank space - Fax: (888) 878-1614
-
Mail:
New Mexico New Hire Directory
PO Box 2999 Mercerville,
NJ 08690
3. Payroll Service:
- If you use a payroll or accounting service, you may ask the service to report new hires on your behalf. Many leading payroll services already report new hires electronically for thousands of employers.
New Hire Reporting Penalties
Failure to timely report new hires: Employers who miss the 20-day reporting deadline may be fined up to $20 per employee not reported.
Conspiracy not to report: If there is a conspiracy between the employer and employee not to report, the penalty increases to up to $500 per newly hired employee.
Corrections
If you discover an error on a previously submitted new hire report, corrections should be made as soon as possible through the New Mexico New Hire Directory. For assistance, contact the New Mexico New Hire Directory directly:
- Phone: (888) 878-1607 — Monday through Friday, 8:00 AM to 5:00 PM MT
- Fax: (888) 878-1614
New Mexico Withholding Tax Forms (Form TRD-41414, Form TRD-41409 & Form TRD-41431)
New Mexico employers are required to withhold state income tax from employee wages and remit it to the New Mexico Taxation and Revenue Department (TRD). New Mexico withholding tax works similarly to federal withholding tax — calculated based on an estimate of the employee's state income tax liability and credited against their actual liability on their New Mexico personal income tax return.
New 2026 Requirement (House Bill 218): Effective January 1, 2026, every employer must file a quarterly wage and withholding report using Form TRD-41431. This is in addition to existing withholding tax returns. All withholding returns and reports are now required to be submitted electronically.
Who Must Withhold
Every employer that withholds federal income tax from employee wages must also withhold New Mexico income tax. This includes employers of some agricultural workers, gambling establishments on paid winnings, and payers of pension and annuity income, upon request by the payee.
No withholding required for:
- Native Americans earn income wholly on tribal lands where they are enrolled and live
- Income from active-duty military service
- Nonresident employees working in New Mexico for 15 or fewer days during the calendar year
-
Self-employed individuals should make estimated payments using Form PIT-ES
New Mexico does not have a state W-4. Employees should complete a copy of the federal W-4 and write "For New Mexico State Withholding Only" across the top. Employers should keep this in the employee's personnel file.
Amount to Withhold
New Mexico 2026 withholding rates range from 1.5% to 5.9% depending on the employee's wages, filing status (single, married, or head of household), and payroll period. No withholding is required if the total withholding for an employee during any one month is less than $1.00.
Refer to Publication FYI-104 for the complete 2026 New Mexico State Wage Withholding Tax Tables for all payroll periods.
Form Types
Form TRD-41414 — Wage Withholding Tax Return
- Purpose: Reports and pays withholding tax withheld from employee wages
- Who must file: All employers withholding New Mexico income tax from wages
- Due date: 25th day of the month following the end of each filing period
- Filing: Electronically via TAP — mandatory. File a zero return if no tax is due
Form TRD-41409 — Non-Wage Withholding Tax Return
- Purpose: Reports and pays withholding from pensions, annuities, and gambling winnings
- Who must file: Payors of pension and annuity income (when requested) and gambling establishments
- Gambling withholding rate: 6% from winnings for both residents and nonresidents
- Due date: 25th day of the month following the end of each filing period
- Filing: Electronically via TAP
Form TRD-41431 — Workers Compensation Fee Return and Employees Quarterly Wage and Withholding Report
- Purpose: Reports each employee's quarterly gross wages and state income tax withheld. Also includes the Workers' Compensation Fee.
- Who must file: All employers withholding New Mexico income tax —effective January 1, 2026
- Due dates: April 25, July 25, October 25, and January 25
- Filing: Electronically via TAP— mandatory
- Workers Compensation Fee (effective July 1, 2025): Employer $2.55 per employee / Employee $2.25 per employee
What to Report
When filing New Mexico withholding tax returns, employers must report:
- Employer Information: New Mexico Business Tax Identification Number (NMBTIN), employer name, and address
- Total Wages Paid: Total employee wages or other compensation subject to withholding for the period
- Total Tax Withheld: Total New Mexico income tax withheld from all employees or payees
- Employee Wage Detail (TRD-41431 only): Each employee's gross wages and New Mexico income tax withheld for
the quarter
How to File
You have several options to submit New Mexico withholding tax returns to the Taxation and Revenue Department:
1. Online — Taxpayer Access Point (Required for all employers):
- Log in at tap.state.nm.us and file Forms TRD-41414, TRD-41409, and TRD-41431.
- All withholding returns and annual withholding statements must be filed electronically
- Bulk W-2 and 1099 data files can be uploaded directly through TAP
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2. Combined Federal/State Filing Program:
- New Mexico participates in the IRS Combined Federal/State Filing Program for submitting 1099 and W-2G information returns electronically
- Include New Mexico program code 35 in the electronic file
3. By Mail (limited only):
- Paper filing is only permitted for remitters with fewer than 50 payees for oil and gas or pass-through entity returns
- All wage withholding returns must be filed electronically — no paper option available
-
Mail to:
Taxation and Revenue Department
P.O. Box 50130
Albuquerque, NM 87181-0130
Tax Payments
All withholding tax payments must be submitted electronically through TAP. Accepted payment methods:
- Electronic check (ACH): Free of charge
- Credit or debit card: Visa, MasterCard, American Express, and Discover accepted. A convenience fee applies
-
Check or money order: Make payable to New Mexico Taxation and Revenue Department. Include your NMBTIN and tax period on the check and mail it to:
Taxation and Revenue Department
P.O. Box 25128 Santa Fe
NM 87504-5128
Do not combine TRD-41414 payments with any other tax or fee. Each tax type requires a separate payment.
NM Withholding Tax Penalties
Employers must file and pay withholding tax returns on time. Failure to meet deadlines results in penalties and interest assessed by the New Mexico Taxation and Revenue Department.
| Penalty Type | Rate / Amount | When Incurred |
|---|---|---|
| Failure to File | 2% per month, up to 20% of tax due | Return not filed by due date |
| Failure to Pay | 2% per month, up to 20% of unpaid tax | Payment not received by due date |
| Electronic Filing Violation | Additional penalties and processing delays | Paper returns submitted when e-filing is required |
| Interest | Determined quarterly based on the federal underpayment rate | On the unpaid balance from the original due date until paid |
NM Withholding Tax Corrections
If you discover an error on a previously filed Form TRD-41414, TRD-41409, or TRD-41431, file an amended return as soon as possible through TAP for each affected period.
Underpayments: File amended returns and submit payment for the difference owed.
Overpayments: Complete Form RPD-41071, Application for Tax Refund, to claim a refund.
Business changes: Use Form ACD-31015 to update your NMBTIN details. Your reporting obligation does not cease automatically when you stop paying wages — notify the Department to cancel your NMBTIN.
For assistance, contact the NM Taxation and Revenue Department:
- Phone: 1-866-285-2996
- Fax: 1-505-841-6327
- Website: https://www.tax.newmexico.gov
New Mexico Unemployment Insurance (UI) Reporting — Forms ES903B
and ES903A
New Mexico employers are required to file unemployment contributions and wage reports using Form ES903B and Form ES903A to the New Mexico Department of Workforce Solutions (NMDWS). These reports help fund the New Mexico Unemployment Compensation Trust Fund, providing benefits to workers who become unemployed through no fault of their own.
Who Must File
All New Mexico employers who pay wages to one or more employees must file quarterly unemployment insurance reports. This includes businesses of all sizes, nonprofit organizations, government entities, and any employer with an active New Mexico UI account.
- Employers must file Form ES903B (for employee wages and contributions) and Form ES903A (for total taxable wages and contribution totals) even if no contributions are due for the quarter.
Taxable Wage Base & Contribution Rates
New Mexico unemployment tax is assessed based on each employee's taxable wages and the employer’s assigned experience rate.
Annual Wage Base:
For 2025, New Mexico's unemployment insurance taxable wage base is $33,200 per employee per year. Wages paid to an employee above this amount are not subject to UI tax for the calendar year.
Contribution Rate:
New Mexico assigns UI contribution rates annually based on an employer’s experience rating.
New Employers:
- 1.00% – 1.18% (based on industry)
Experienced Employers:
- Rates vary based on benefit charges and payroll history.
- Typically, they range from 0.33% to 5.4%.
What to Report
Employers must report the following information each quarter:
Employee Wage Information:
- Total gross wages paid during the quarter
- Taxable wages (up to $33,200 wage base)
Employer Information:
- Legal business name
- New Mexico UI Account Number
- Federal Employer Identification Number (FEIN)
- Reporting quarter and year
Quarterly Contribution Data:
- Taxable wages multiplied by the employer’s assigned unemployment insurance contribution rate
When to File
New Mexico UI reports must be filed quarterly. The due dates are:
- Q1 (Jan–Mar): April 30
- Q2 (Apr–Jun): July 31
- Q3 (Jul–Sep): October 31
- Q4 (Oct–Dec): January 31 of the following year
How to File
New Mexico provides multiple filing options for unemployment insurance reporting.
1. Online (Recommended):
- Log in using your New Mexico UI account credentials
- Enter quarterly wage and contribution information.
- Submit the report electronically.
- Make payment through approved electronic methods.
- Electronic filing is strongly encouraged for accuracy and faster processing.
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2. By Mail:
- Employers permitted to file paper reports may submit completed forms by mail.
-
Mail the completed form to:
New Mexico Department of Workforce Solutions
Unemployment Insurance Division
P.O. Box 2281
Albuquerque, NM 87103-2281
3. By Fax:
- You can fax the completed form to (505) 841-8636
- Keep a copy of your fax confirmation for proof of submission.
Tax Payments
UI tax payments must be submitted separately from paper wage reports.
Electronic Funds Transfer (EFT):
- Online payment through the NMDWS portal
Check or Money Order:
- Payment by check or money order if mailing
Payments must be made by the quarterly due date to avoid penalties and interest.
New Mexico Unemployment Insurance Penalties
Employers must file quarterly UI reports and pay contributions on time. Failure to comply results in penalties under the New Mexico Unemployment Compensation Law.
Late Filing Penalty
-
If a quarterly wage report is filed after the due date:
- $25 or 10% of the contributions due, whichever is greater, per report
Late Payment Penalty:
-
If UI contributions are not paid by the due date:
- 10% of the unpaid tax due
- Interest accrues at 1% per month until paid.
New Mexico Unemployment Corrections
If you discover an error on a previously filed New Mexico UI report:
- Submit a corrected or amended wage report through the New Mexico UI online system
- Update incorrect wages, taxable amounts, or contribution calculations.
- Pay any additional tax, penalties, or interest due
New Mexico Payroll Tax Filing — Simple, Transparent Pricing
TaxBandits offers clear, flat-rate pricing for New Mexico forms, ensuring fast, accurate, and affordable e-filing.
| Forms | Pricing* |
|---|---|
| New Hire Reporting | $1 / Employee |
| Withholding Form (TRD-41414TRD-41409, TRD-41431) | $5.95 |
| Unemployment Wage Report (ES903B , ES903A) | $5.95 |
*No hidden fees. No subscriptions. Pay only for what you file.
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Filing Easy
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- New Hire Reporting
- Forms TRD-41414, TRD-41409 & TRD-41431
- Forms ES903B & ES903A
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Frequently Asked Questions
How do I report a new hire in New Mexico?
Report online at nm-newhire.com using your FEIN and employee details. You can also fax to (888) 878-1614 or mail to New Mexico New Hire Directory, PO Box 2999, Mercerville, NJ 08690. Online reporting is available 24/7 and provides instant confirmation. If you use a payroll service, they can report on your behalf.
How long do New Mexico employers have to report a new hire?
New Mexico employers must report new hires within 20 calendar days of the hire or rehire date. Electronic filers must submit two monthly transmissions no more than 16 days apart. This applies to full-time, part-time, temporary, and seasonal employees — even if they work just one day.
What is the penalty for not reporting new hires in New Mexico?
Employers who miss the 20-day deadline may be fined up to $20 per employee not reported. If the employer and employee conspire to avoid reporting, the penalty increases to up to $500 per employee.
Does New Mexico have its own state W-4 form?
No. New Mexico does not have a separate state W-4. Employees complete the standard federal W-4 and write "For New Mexico State Withholding Only" across the top. Employers must keep this form in the employee's personnel file. Withholding is then calculated using New Mexico's annual tax tables in Publication FYI-104, with 2026 rates ranging from 1.5% to 5.9%.
When is Form TRD-41431 due in New Mexico?
Form TRD-41431 is due quarterly — April 25 for Q1, July 25 for Q2, October 25 for Q3, and January 25 for Q4. This form is required for all employers starting January 1, 2026, under House Bill 218. It reports each employee's gross wages, state income tax withheld, and the Workers' Compensation Fee ($2.55 employer / $2.25 employee per quarter). Filing must be done electronically through TAP at tap.state.nm.us.
What is the penalty for filing New Mexico withholding tax returns late?
Late filing and late payment each carry a penalty of 2% per month, up to 20% of the tax due. Filing on paper when e-filing is required adds further penalties and processing delays. Interest accrues on any unpaid balance from the original due date. To correct a previously filed return, file an amended return through TAP at tap.state.nm.us.
How do I file New Mexico UI tax reports?
Log in to your account at the New Mexico Department of Workforce Solutions portal and file Forms ES903B and ES903A electronically each quarter. Employers who cannot file online may mail completed forms to NMDWS, Unemployment Insurance Division, PO Box 2281, Albuquerque, NM 87103-2281, or fax to (505) 841-8636.
Do I need to file a UI report if I paid no wages this quarter?
Yes. New Mexico employers must file Forms ES903B and ES903A every quarter, even if no wages were paid and no contributions are owed. Failure to file results in a penalty of $25 or 10% of contributions due — whichever is greater — plus interest of 1% per month on any unpaid balance.
Does filing New Mexico UI reports on time reduce my federal unemployment tax?
Yes. Employers who file and pay New Mexico UI contributions on time are eligible for up to a 5.4% FUTA credit, reducing the federal unemployment tax rate from 6.0% to just 0.6% on the first $7,000 of wages per employee per year. Staying current with state UI filings is the easiest way to keep your FUTA liability low.
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