The New Mexico Department of Revenue revised publication FY-104 and its withholding tables for 2018 in response to the recent passage of the Tax Cuts and Jobs Act. The revised withholding tables are effective and retroactive to January 1, 2018.
The agency has stated that the tables are to be used going forward and employers are not being asked to retroactively adjust payroll withholding.
The withholding tables published in FY-104 have been updated to reflect these changes by limiting the withholding allowance deducted from wages to no more than three allowances. Employees with more than three allowances may see an increase in their withholding tax as a result of these changes to federal law. Even after these changes, there is an increased likelihood that such households will by under-withheld for state income tax purposes.
New Mexico does not have a state equivalent of the Federal W-4 form. Employees should complete a copy of the federal W-4 for New Mexico, writing “For New Mexico State Withholding Only” across the top in prominent letters. Keep the New Mexico W-4 in the employee’s personnel file. The employee may choose a different number of allowances for state withholding than for federal withholding.
Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity Account Manager.