New Mexico modifies annual withholding statement requirements

New Mexico enacted legislation that revises the annual personal income tax withholding statement requirements to:

  • Remove exemptions for certain employers and payors;
  • Require electronic filing for certain employers and payors;
  • Change the due date; and
  • Establish a late filing penalty.

Exemptions.

The legislation repeals the annual withholding statement exemption for employers required to file (1) quarterly withholding information returns, or (2) wage and contribution reports to the Workforce Solutions Department. In addition, the quarterly reporting exemption for payors that withhold tax from an individual’s pension or annuity is also repealed. These changes apply to tax years beginning after 2018.

E-Filing.

Employers with 25 or more employees and any person withholding taxes from winnings must file annual withholding statements electronically. This requirement applies to tax years beginning after 2018.

Due date.

Beginning with the 2019 tax year, the due date for annual withholding statements is moved from February 28 to January 31.

Penalties.

For tax years beginning after 2019, a penalty is imposed on any employer or payor filing a late annual withholding statement. The penalty is equal to 2% per month of gross wages reported for all employees in that year. However, the penalty is also limited to 20% of gross wages for the year. The penalty may be waived if the late filing is due to reasonable cause and not willful neglect. (H.B. 276, Laws 2018, approved March 2, 2018, effective May 16, 2018, and applicable as noted.)

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