working and living on Navajo Reservation. in 2022 worked in both Az and NM at two different sites as a contractor. Paid by the same company I work with, but have to file as self employed contractor. I am a resident of Az and will file exemption for that state, but do I also do this for NM, if I am not a resident of NM.
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Since you were physically present working in New Mexico, you could file a Non-Resident return there and claim your exemption.
Here's more info from New Mexico Taxation.
Prepare your NM return first, then your Arizona Resident.
How to File a Non-Resident State Return
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