New Mexico issues revised 2018 withholding tables

New Mexico has issued withholding tables for wages paid on and after January 1, 2018. The tables were revised due to the changes in federal tax law. State income tax liability was not reduced based on the number of personal exemptions claimed by a taxpayer. Although the standard deduction amount was increased for all taxpayers, tax liability will likely increase for households with 2 or more dependents. The withholding tables have been updated to reflect the changes by limiting the withholding allowance deducted from wages to no more than three allowances. Employees with more than three allowances may see an increase in their withholding tax as a result of the changes to federal law. Even after these changes, there is an increased likelihood that such households will be under-withheld for state income tax purposes. The annual exemption amount is $4,150. The supplemental wage rate remains 4.9%. All of the tables will be reproduced in the Payroll Management Guide at ¶7388 and ¶7389 in a future release. (New Mexico Taxation and Revenue Department, FYI-104, New Mexico Withholding Tax Effective January 1, 2018 (Rev.5-18).)

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