How New Mexico withholds on a bonus
New Mexico lets employers withhold a flat 5.9% on supplemental wages paid separately, the state's top rate, which applies on the return only above $210,000 of taxable income for a single filer. On a $10,000 bonus the percentage method withholds $2,200 federal, $620 Social Security, $145 Medicare and $590 New Mexico, leaving $6,445. There are no local income taxes in New Mexico.
A $60,000 single filer's actual New Mexico marginal rate is 4.7% (the bracket from $33,500 to $66,500 of taxable income), so the 5.9% flat rate over-withholds by about $120 on a $10,000 bonus, which returns at filing. Under the aggregate method New Mexico applies its brackets to the combined paycheck, withholding closer to 4.7% to 4.9%; the federal line rises to about $2,700.
What the withholding means for your New Mexico return
A New Mexico bonus over-withholds on both sides for most filers: 22% federal against a 12% to 22% marginal rate, and 5.9% state against 4.7% to 4.9%, so roughly $750 federal and $100 to $120 state return on a $10,000 bonus for a $60,000 earner. Texas residents who earn a bonus for work in New Mexico are withheld for New Mexico on it. The New Mexico paycheck calculator shows the marginal rates for any salary. New Mexico uses the federal W-4, whose entries do not change the flat 5.9% withheld from a separately paid bonus; they matter only under the aggregate method, where the bonus is combined with the period's regular wages.