Effective January 1, 2026, House Bill 218 introduces four changes to New Mexico withholding tax reporting:
Quarterly Reporting Expansion. All employers and payers must file quarterly returns reporting employee and payee compensation and New Mexico income tax withheld. Previously, this requirement applied only to employers with more than 50 employees who did not file unemployment insurance taxes with the Workforce Solutions Department. The Department has introduced Form TRD-41431 (Workers Compensation Fee Return and Employees Quarterly Wage and Withholding Report), a new form that replaces Form TRD-31109 and WC-1. TRD-41431 is filed in addition to existing withholding tax payment returns (TRD-41414 Wage Withholding Tax Return and TRD-41409 Non-Wage Withholding Tax Return).
Quarterly Filing Deadline. The quarterly filing deadline has been accelerated from the last day of the month to the 25th day of the month following the close of each calendar quarter.
Electronic Filing and Payment. All employers and payers must electronically file and pay quarterly wage withholding, non-wage withholding, and workers’ compensation fees regardless of size. The previous 25-employee electronic filing threshold has been eliminated.
Annual Withholding Statements. All employers must electronically file annual withholding statements (W-2, W-2G, 1099), subject to Department waiver. The previous 25-statement threshold has been eliminated. Electronic submissions may be made through the Combined Federal/State Filing Program or the Taxpayer Access Point (TAP).
New Mexico’s 2026 FYI-104 (New Mexico Withholding Tax) can be found here.
New Mexico’s October 9, 2025 press release on these changes can be found here.
