Live in Arizona, work in New Mexico
No reciprocity: you file a nonresident return in the work state and pay its tax. Your home state gives a credit for that tax, so you pay the home state only if its tax is higher.
State income tax: $3,569 a year
Living in Arizona and working in New Mexico, you'd pay about $3,569 in state income tax on $100,000 of wages, $1,472 more than if you worked in Arizona.
No reciprocity: you file a nonresident return in the work state and pay its tax. Your home state gives a credit for that tax, so you pay the home state only if its tax is higher.
State tax at different salaries
| Wages | To NM | To AZ | Total | If you worked in AZ |
|---|---|---|---|---|
| $50,000 | $1,184 | $0 | $1,184 | $848 |
| $75,000 | $2,359 | $0 | $2,359 | $1,473 |
| $100,000 | $3,569 | $0 | $3,569 | $2,098 |
| $150,000 | $6,019 | $0 | $6,019 | $3,348 |
| $250,000 | $11,158 | $0 | $11,158 | $5,848 |
Single filer, all wages earned in New Mexico, 2026 state tax rules, standard deductions. Local income taxes not included.
What to do
- Ask your employer to withhold New Mexico tax. If Arizona's tax is higher, withhold the difference for Arizona too (or make estimated payments) to avoid an underpayment penalty.
- File the New Mexico nonresident return first, then claim the credit for taxes paid to another state on your Arizona resident return.
- Keep a record of the days you work in each state, especially if you sometimes work from home.
Special credit rules
- AZ: Reverse-credit state: for residents of CA, IN, OR, VA working in AZ, AZ (the work state) gives the credit, not the resident state. AZ residents working in those states get no AZ credit for that tax; the other state credits AZ tax instead.
Frequently asked questions
Do I pay New Mexico income tax if I live in Arizona?
Yes. New Mexico taxes wages earned there by nonresidents. On $100,000 that's about $3,569.
Do I have to file taxes in both Arizona and New Mexico?
Usually yes: a nonresident return in New Mexico and a resident return in Arizona, where you claim a credit for the tax paid to New Mexico. File the New Mexico return first.
Will I be taxed twice?
Not on the same state-level wages. Arizona credits the tax you pay New Mexico, so your total is about $3,569 on $100,000, compared with $2,098 if you also worked in Arizona. Local city or county taxes may still apply.
Related
- Live in New Mexico, work in Arizona
- Moving from Arizona to New Mexico
- Moving from New Mexico to Arizona
- Live in Arizona, work in California
- Live in Arizona, work in Nevada
- Live in Arizona, work in Utah
Rules reviewed 2026-09-24 from state revenue departments and the Tax Foundation. Estimates only; confirm with each state's revenue department.