SMALL BUSINESS INCOME TAX WITHHOLDINGS

SB 448 (New Mexico Senate Bill 448) allows small employers with 50 or fewer employees to choose not to withhold income tax from their employees' wages. Instead, these employers must notify the state tax department and inform employees that they are responsible for making their own quarterly estimated tax payments. The bill applies to taxable years beginning January 1, 2026, and directly affects small businesses and their employees by shifting tax withholding responsibility. It does not change tax rates or liability but modifies the withholding process for qualifying employers. The bill is currently pending before committees after being postponed indefinitely in June 2025.