New Mexico
Overall Rating for Taxes on Retirees: Least tax-friendly
State Sales Tax: 5.125% state levy. Localities can add as much as 4.13%, and the average combined rate is 7.78%, according to the Tax Foundation. New Mexico’s tax is a gross receipts tax that covers most services.
State Income Tax Range: Low: 1.7% (on up to $5,500 of taxable income for single filers and $8,000 for joint filers); High: 4.9% (on taxable income over $16,000 for single filers and over $24,000 for married couples filing jointly)
State Taxes on Social Security: Benefits are taxed. But Social Security income can be included as part of an overall retirement-income exemption of up to $8,000 per person, subject to income restrictions.
Property Taxes: The median property tax on New Mexico’s median home value of $161,600 is $1,232.
