Lente Proposes Eliminating State Income Tax Under $50K
New Mexico lawmakers heard a plan to replace six tax brackets with one 4.7 percent rate and credit low earners to zero liability.
Updated on Nov. 14, 2026 in Taxes
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Should New Mexico eliminate income tax for filers earning under $50,000?
Rep. Derrick Lente has proposed an overhaul of New Mexico's personal income tax that would extinguish state income tax liability for filers earning under $50,000 per year. The proposal was heard by lawmakers on November 13, 2026, and would affect 266,000 New Mexico filers.
Why it matters
The plan would replace the state's current six-bracket structure with a single 4.7 percent rate, shifting how income tax is distributed across New Mexico households. The proposal would also reduce revenue to the recurring general fund, a trade-off that lawmakers would need to weigh against the relief it offers to lower- and middle-income filers.
The estimates are fiscal projections from the proposal's analysis, covering 266,000 affected filers and a general fund reduction of $310 million in Fiscal Year 2028 and $729 million in Fiscal Year 2029. How the state would replace that lost revenue has not been addressed.
The players
Derrick Lente
New Mexico state representative who proposed the personal income tax overhaul and plans to introduce it in the upcoming legislative session.
Peter Wirth
New Mexico state senator who has expressed interest in Lente's proposal.
The details
Under the proposal, filers earning under $50,000 (single) or $100,000 (married or head of household) would have their state income tax liability fully extinguished through a credit. Higher earners would see the credit phased out in a graduated system until they pay the flat 4.7 percent rate, which would replace the current six brackets.
Timeline
November 13, 2026: Lawmakers heard the tax proposal.
Fiscal Year 2028: General fund revenue would decline by $310 million if implemented.
Fiscal Year 2029: First full year in effect, with a $729 million reduction in state revenue.
Upcoming legislative session: Rep. Lente plans to introduce the proposal.
Market Dynamics
The proposal would replace New Mexico's current six-bracket personal income tax with a single 4.7 percent rate, a structural departure from the graduated system that governs state tax liability today. It shifts the state toward a flat-rate model that pairs broad low-income exemption with a phase-out for higher earners.
A single filer earning under $50,000 would have at least $1,500 more per year, and a married or head-of-household filer earning $100,000 or less would pay no personal income tax under the proposal. Filers above those thresholds would see the credit phased out, so the savings would taper for higher earners.
The takeaway
The proposal would shift a large share of New Mexico's income tax relief toward lower- and middle-income households, but its $729 million annual cost to the general fund would require lawmakers to identify replacement revenue or spending changes. Filers near the income thresholds should watch how the phase-out is written in the final bill.
What happens next
Rep. Derrick Lente plans to introduce the tax proposal during the upcoming legislative session.
Further reading
For broader context on how state tax policy is structured, see Taxes coverage on Wisevoter.
Source note: This article includes information reported by KRQE 13.
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Should New Mexico eliminate income tax for filers earning under $50,000?
