Yes, the leftover grant would be considered NM income. I assume you received a 1098 T and your grant was was reported on Box 5 was more than reported in Box 1. Respond back to us if this was not the case if the grant money was reported to you in any other manner.
If you reported your W2 and 1098 T in your federal return, the only thing you need to do is first prepare your Colorado non-resident state return then your NM state return. As you prepare your Colorado return, there should be allocation screens for both your wages and grant money. For your W2 income, you would allocate the entire amount to Colorado and for the grant money left over, you would put a 0 or leave that portion blank.
NM will tax for all your income but will give you credit for the taxes paid to the state of Colorado as a result of the income earned in that state. This amount is listed in line 20 in your NM PIT-1 return.
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