A resident of New Mexico who must pay tax to another state on income that is also taxable in New Mexico may take a credit against New Mexico tax for tax paid to the other state.
IMPORTANT: This credit is for tax that another state imposes on any part of income that by law is included in New Mexico net income. When calculating the allowable credit, do not include tax withheld. If the specific item of income is not subject to taxation in both states, no credit is available.
The credit may not be more than:
• The New Mexico tax liability due on your PIT-1,
• The tax you paid to the other state.
• The amount of New Mexico income tax liability calculated on the part of income taxed in both states.