Live in New Mexico, work 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 income tax: $3,569 a year
Living in New Mexico and working in Arizona, you'd pay about $3,569 in state income tax on $100,000 of wages.
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 AZ | To NM | Total | If you worked in NM |
|---|---|---|---|---|
| $50,000 | $848 | $337 | $1,184 | $1,184 |
| $75,000 | $1,473 | $887 | $2,359 | $2,359 |
| $100,000 | $2,098 | $1,472 | $3,569 | $3,569 |
| $150,000 | $3,348 | $2,672 | $6,019 | $6,019 |
| $250,000 | $5,848 | $5,311 | $11,158 | $11,158 |
Single filer, all wages earned in Arizona, 2026 state tax rules, standard deductions. Local income taxes not included.
What to do
- Ask your employer to withhold Arizona tax. If New Mexico's tax is higher, withhold the difference for New Mexico too (or make estimated payments) to avoid an underpayment penalty.
- File the Arizona nonresident return first, then claim the credit for taxes paid to another state on your New Mexico 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 Arizona income tax if I live in New Mexico?
Yes. Arizona taxes wages earned there by nonresidents. On $100,000 that's about $2,098.
Do I have to file taxes in both New Mexico and Arizona?
Usually yes: a nonresident return in Arizona and a resident return in New Mexico, where you claim a credit for the tax paid to Arizona. File the Arizona return first.
Will I be taxed twice?
Not on the same state-level wages. New Mexico credits the tax you pay Arizona, so your total is about $3,569 on $100,000, compared with $3,569 if you also worked in New Mexico. Local city or county taxes may still apply.
Related
- Live in Arizona, work in New Mexico
- Moving from New Mexico to Arizona
- Moving from Arizona to New Mexico
- Live in New Mexico, work in Colorado
- Live in New Mexico, work in Oklahoma
- Live in New Mexico, work in Texas
Rules reviewed 2026-09-24 from state revenue departments and the Tax Foundation. Estimates only; confirm with each state's revenue department.