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Summary of differences between federal and state regulations
Income tax withholding
Employers who make lump sum distributions, one time bonuses and other irregular payments to employees in addition to regular wages and employers required to withhold tax on fringe benefits for federal purposes must compute the state withholding in the same manner used for computing federal withholding on these items. The employer will then use the withholding tax tables issued by New Mexico to compute the amount of withholding tax due.
If an employer elects to withhold, for federal purposes, a flat percentage of the lump sum distribution, one time bonus, fringe benefits and other irregular wages as provided in the Internal Revenue Code, the employer must withhold 8.2% of the lump sum distributions, one time bonus, fringe benefits and other irregular wages for state withholding tax purposes.
Railroads are required to withhold New Mexico withholding tax from the wages, salaries or other employee remuneration of any employee who is a resident of the state, without regard to the place of employment or amount of time which the employee performs services for the employer in New Mexico or other states.
Motor carriers, private motor carriers and airlines must withhold New Mexico income tax from the wages, salaries or other employee remuneration of any individual employee who is a resident of the state, without regard to the place of employment or amount of time which the employee performs services for the employer in New Mexico or other states.
Unemployment taxes
All states finance UC primarily through contributions from subject employers on the wages of their covered workers. In addition, three states (Alaska, New Jersey, and Pennsylvania) collect contributions from employees. These taxes are deposited by the state to its account in the UTF in the Federal Treasury, and are withdrawn as needed to pay benefits.
Many states have adopted a higher tax base than what is provided in FUTA. Hawaii's wage base is usually higher and changes periodically. In all states, an employer pays a tax on wages paid to each worker within a calendar year up to the amount specified in state law. In addition, most of the states provide an automatic adjustment of the wage base if federal law is amended to apply to a higher wage base than that specified under state law. As a result of the many variables in states taxable wage bases and rates, benefit formulas, and economic conditions, actual tax rates vary greatly among the states and among individual employers within a state.
Wages subject to unemployment tax in this state equal $16,800.
Minimum and maximum rates in this state are 0.03 and 5.4 %. Rates apply to experience rated employers only and do not include applicable surtaxes or penalties.
State
Contacts
Income tax withholding
Taxation and Revenue Department
Unemployment taxes
Department of Labor
Regulations
Income tax withholding
TITLE 3: Taxation CHAPTER 3: Personal Income Taxes PART 2: Withholding Wages And Unearned Income (NMAC 3.3.2)
Unemployment taxes
Title 11, Chapter 3 Employment Security
Federal
ContactsInternal Revenue Service
Regulations Title 26 Code of Federal Regulations, Internal Revenue