New Mexico prorates tax as if a full year resident. Let me do an example.
- Pretend you earn $5,000 in NM and $45000 in another state.
- Total income is $50,000.
- NM says tax on $50,000 is 4.9% = $2,450.
- Next, NM prorates for the NM portion of income
- $5,000 / $50,000 = 10% earned in NM
- Total tax $2450 x 10% = $245 tax to NM.
This allows NM to use a higher tax rate and is common practice.
@ChrisOBrien
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