Live in Texas, work in New Mexico
State income tax on wages · single filer · tax year 2026
New Mexico takes
$1,654
on wages earned there
Texas takes
$0
after the credit it gives
Both together
$1,654
state tax for the year
Cost of the line
$1,654
a year, above working at home
What crossing the line costs
costs youNew Mexico charges more than Texas would, and Texas only credits you up to its own bill — so the difference stays with you. Solid is what you actually pay; the faded part of the Texas bar is the credit it hands back. State income tax only — federal and payroll tax apply on top, and a city wage tax may too.
Which state taxes you, and what it costs
- You are not taxed twice over. You are taxed at the higher of the two rates, which is its own kind of bad news. Texas hands back what you paid New Mexico, but only as far as its own bill goes. Anything New Mexico charges above that, you keep paying. On this salary the year comes to $1,654. Work at home instead and it would be $0.
- This is the busiest way into New Mexico. 25,286 jobs in the state belong to Texas residents, more than any other state sends. It is worth knowing that the rules below are not an edge case — they apply to a lot of people.
- New Mexico taxes wages earned inside its borders by non-residents, and Texas taxes its residents on the same wages wherever they are earned. The resident credit resolves the overlap but does not erase it: Texas credits tax paid to New Mexico only up to what it would itself have charged on that income, so the commuter settles at the higher of the two liabilities rather than the sum. At the reference salary that is $1,654 against $0 for the same earner working at home — $1,654 attributable to the state line itself. ⚠️ The corollary is the part most readers have backwards: moving to a cheaper home state while keeping the job in New Mexico changes the split between the two treasuries and not the total.
- Measured against every other state sending commuters into New Mexico, this is the largest single flow: 25,286 jobs held by Texas residents, ahead of all 3 corridors of this size into that state. Census LODES counts jobs rather than people, so a worker holding two positions in New Mexico appears twice.
Where the money goes
A $75,000 salary
- Federal income tax$7,670
- Social Security and Medicare$5,738
- Yours$61,593
| Federal income tax10.23% | $7,670 |
|---|---|
| Social Security and Medicare7.65% | $5,738 |
| Yours82.12% | $61,593 |
Which rung you are on
A $75,000 salary
| This rung starts at | $66,500 |
|---|---|
| Next rung starts at | $121,800 |
| Room before it | $46,800 |
Federal only, measured on gross pay — so the first rung is what the standard deduction covers.
The arithmetic, step by step
| New Mexico takes, on wages earned there | $1,654 |
|---|---|
| Texas charges its residents | $0 |
| Less the credit Texas gives | $0 |
| Total state tax | $1,654 |
| If you also worked in Texas | $0 |
| Difference | $1,654 |
On a reference salary of $60,000 a year, single filer. Both states run progressive schedules, so the figures do not simply scale — use the tool above for your own salary.
What this page does not cover
- What you see here is state tax between Texas and New Mexico. Cities can charge their own tax on top, and a handful do. That layer is not modeled on this page, so treat these figures as the floor rather than the final bill.
- The figures take the simple case: one job, in New Mexico, worked in person. Money from several states makes the credit a proportion instead of a cap. Working remotely from Texas can pull you under a different rule entirely, depending on the state.
- Sixty thousand a year is the assumption behind these amounts, chosen because nobody publishes average pay for a route between two states. At your own salary the numbers shift. The conclusion about which of Texas and New Mexico takes more usually does not, but the size of the difference can.
- These figures cover the STATE layer only. City and municipal wage taxes sit on top of them and are not included: a commuter into Philadelphia pays its wage tax on top of anything here, and Ohio's municipalities run their own credit system, which this site models in its own families. New York City, by contrast, taxes only its residents, so a commuter into it adds nothing at the city level. Whether New Mexico or Texas carries a local layer is a separate question from the state arithmetic above.
- The arithmetic assumes all wages are earned in New Mexico and that there is no other income. That matters for the credit: where income comes from several states, Texas limits the credit to the share of its own tax attributable to the New Mexico portion, computed as a ratio rather than the straightforward cap used above. It also assumes days are worked in New Mexico rather than remotely — several states tax a non-resident's remote days as though they were worked at the employer's location, which reverses the usual expectation and is handled on this site's reciprocity pages.
- Dollar amounts are computed at a stated reference salary of sixty thousand rather than a corridor wage average, which no published source provides per state pair. Because both states' liabilities and the credit between them are functions of the same income, the direction of the Texas to New Mexico comparison holds at other salaries even though the amounts do not — with one qualification worth stating, that a progressive schedule can change the SIZE of the gap at higher incomes, and in New Mexico's case a bracket crossed on one side and not the other is exactly where that happens.
Questions people ask
Do I pay state tax twice, to Texas and New Mexico?
Not twice over. Both states have a claim — New Mexico because you earn the money there, Texas because you live there — but Texas gives you credit for what New Mexico took. The credit stops at what Texas would have charged on its own, so what you actually pay is the bigger of the two bills. Here that comes to $1,654 for the year.
Would moving out of Texas lower my state tax if I keep working in New Mexico?
Probably not, and this is the part people get wrong. New Mexico taxes the wages because that is where you earn them, whoever you are and wherever you sleep. Your home state only ever credits you up to its own bill. So moving somewhere cheaper changes which government keeps the money, not how much leaves your pay. What would change it is the job moving, not you.
Do I have to file tax returns in both Texas and New Mexico?
Usually yes, and it catches people out. Texas wants a return because you live there. New Mexico usually wants one too, because you earned money inside it — even in the cases where you end up owing it nothing. Filing in a state and paying it are separate things, and the return is often what proves you do not owe.
What if I work from home in Texas some days instead of going to New Mexico?
Normally, days worked at home in Texas belong to Texas, and only the days you spend in New Mexico are taxed there. That is the ordinary rule. The exception is real though: some states count your remote days as worked at the employer's location anyway. That flips the answer completely, so check New Mexico's rule rather than assuming.
How is liability allocated between residence and work state on the same wages?
Both jurisdictions assert a claim on the same wages — New Mexico on a source basis, Texas on residence. The residence state grants a credit for tax paid to the source state, limited to the residence state's own liability on that income. Net combined liability therefore equals the greater of the two liabilities rather than their sum, $1,654 at the reference salary, and the split between the two treasuries is the only thing the credit changes.
Does changing residence reduce combined liability while the work state is unchanged?
No, while the source state is unchanged. New Mexico's claim arises from where the services are performed and is unaffected by residence. Because the residence credit is capped at the residence state's own liability, combined liability equals the greater of the two — so substituting a lower-tax residence reduces the residence-state component toward zero while leaving the total at New Mexico's level. The binding variable is the work location, not the home one.
What filing obligations arise in each state on this corridor?
Generally two. Texas requires a resident return reporting all income; New Mexico requires a non-resident return reporting the income sourced to it, which is also the mechanism by which the resident credit is substantiated. ⚠️ A filing obligation is distinct from a liability: a reciprocity exemption or a zero net position removes tax without necessarily removing the return, and the non-resident return is frequently what establishes the credit claimed on the resident one.
How do remote working days affect sourcing between these two states?
Ordinarily wages are sourced to where the services are performed, so days worked remotely from Texas fall outside New Mexico's jurisdiction and the source-state apportionment shrinks accordingly. ⛔ The exception is the "convenience of the employer" rule, which several states apply: a non-resident's remote days are sourced to the employer's location unless the remote work is required by the employer rather than chosen by the employee. The figures on this page model in-person attendance in New Mexico throughout.