StructureCost2026

New Mexico: what each business structure costs a year

At $100,000 profit, an LLC taxed as an S corp costs $4,890 a year less than a sole proprietorship in New Mexico. All figures are 2026 tax and fees.

$4,890 a year

less as an LLC taxed as an S corp than as a sole proprietorship in New Mexico, at these numbers. That includes the state's pass-through entity tax election.

More settings revenue, salary, filing status, payroll costs, PTET

New Mexico, 2026: $100,000 profit, single filer

StructureYearly costvs yoursTo set up
Sole proprietorship yours $25,588 $0
Itemized: $25,588
Self-employment taxirs.gov, 2026 rates$14,130
Federal income taxirs.gov, 2026 rates$8,235
State income taxrealfile.tax.newmexico.gov, checked Oct 20, 2026$3,223
Yearly cost$25,588
Single-member LLC $25,588 +$0 $50
Itemized: $25,588
Self-employment taxirs.gov, 2026 rates$14,130
Federal income taxirs.gov, 2026 rates$8,235
State income taxrealfile.tax.newmexico.gov, checked Oct 20, 2026$3,223
Yearly cost$25,588
LLC taxed as an S corp lowest $20,698 −$4,890 $50
Itemized: $20,698
Payroll tax on your salaryirs.gov, 2026 rates$6,510
Payroll service and tax return (estimate)$1,800
New Mexico corporate franchise taxtax.newmexico.gov, checked Oct 20, 2026$50
New Mexico pass-through entity tax, paid by the company (elected)tax.newmexico.gov, checked Oct 20, 2026$3,227
Federal income taxirs.gov, 2026 rates$9,029
State income tax, after the PTET creditrealfile.tax.newmexico.gov, checked Oct 20, 2026$82
Yearly cost$20,698
S corporation $20,709 −$4,879 $100
Itemized: $20,709
Biennial Report (plus $25 initial report)nmonesource.com, checked Oct 20, 2026$13
Payroll tax on your salaryirs.gov, 2026 rates$6,510
Payroll service and tax return (estimate)$1,800
New Mexico corporate franchise taxtax.newmexico.gov, checked Oct 20, 2026$50
New Mexico pass-through entity tax, paid by the company (elected)tax.newmexico.gov, checked Oct 20, 2026$3,227
Federal income taxirs.gov, 2026 rates$9,027
State income tax, after the PTET creditrealfile.tax.newmexico.gov, checked Oct 20, 2026$82
Yearly cost$20,709
C corporation $30,036 +$4,448 $100
Itemized: $30,036
Biennial Report (plus $25 initial report)nmonesource.com, checked Oct 20, 2026$13
Payroll tax on your salaryirs.gov, 2026 rates$6,510
Payroll service and tax return (estimate)$2,000
New Mexico corporate franchise taxtax.newmexico.gov, checked Oct 20, 2026$50
State corporate income taxtax.newmexico.gov, checked Oct 20, 2026$3,215
Federal corporate income tax (21%)irs.gov, 2026 rates$10,767
Federal income taxirs.gov, 2026 rates$4,863
State income taxrealfile.tax.newmexico.gov, checked Oct 20, 2026$2,618
Yearly cost$30,036
What these figures count
  • State income tax, and state taxes on the business itself: franchise, LLC, S corp, gross receipts and excise taxes.
  • Social Security and Medicare on both sides of an owner salary, federal unemployment tax and the state's new-employer rate.
  • The 20% qualified business income deduction with its income limits and the professional-service rule.
  • Yearly report fees, and a cost you can change for payroll and the business tax return.

Many S corp calculators leave out state taxes and the QBI deduction, which can make the election look better than it is.

When an S corp election pays in New Mexico

Electing S corp tax treatment for an LLC starts to pay in New Mexico at about $50,000 of profit, with the default salary and $1,800 a year for payroll and the extra tax return.

An S corp in New Mexico can elect to pay the state's income tax itself, a pass-through entity tax of 5.9%, and the owner gets a credit for it. The company deducts it on the federal return, so it is not held to the SALT cap. The calculator uses it when it lowers the totaltax.newmexico.gov.

ProfitSole propLLCLLC as S corpC corp
$30,000$5,464$5,464$6,971$7,477
$50,000$10,763$10,763$10,592$13,154
$75,000$17,605$17,605$14,252$20,409
$100,000$25,588$25,588$20,698$30,036
$150,000$43,107$43,107$35,264$50,989
$200,000$61,207$61,207$50,644$71,129
$300,000$105,321$105,321$84,348$112,952

Single filer, no other income, revenue taken as 1.5 times profit, default salary. The lowest cost in each row is marked.

State fees and taxes in New Mexico

LLCCorporation
Filing to form$50Articles of Organization$100Articles of Incorporationnmonesource.com
Yearly reportNo yearly report feeBiennial Report (plus $25 initial report), $25 every two yearssos.nm.gov
Report dueNo report required15th day of the fourth month after the tax year end, every two years
New Mexico corporate franchise tax$50if taxed as S corpyestax.newmexico.gov

Not in the calculator: New Mexico gross receipts tax (state rate 4.875%, combined 4.875% to over 9% with county and city rates) is imposed on the business's gross receipts for most sales of goods and services, but is normally passed to customers as a separately stated charge, so it is not modelled as a cost of the business structure. No local income taxes.

Switching calculators for New Mexico

By profession in New Mexico

Questions

Is an S corp worth it in New Mexico?

On these figures, from about $50,000 of profit. At $100,000 an LLC taxed as an S corp costs $20,698 a year against $25,588 for a plain LLC, $4,890 less. The saving comes from paying Social Security and Medicare tax on a salary instead of on all profit.

How much does an LLC cost per year in New Mexico?

The state charges no yearly report fee. Forming one costs $50.

Does New Mexico recognise the S corp election?

Yes. The federal election carries over with no separate state form. Federal S election is followed; S corps file the NM S-Corp return, pay the $50 franchise tax, and withhold for nonresident owners. An annual elective entity-level tax at 5.9% is available to pass-through entities.

What income tax does New Mexico charge?

New Mexico taxes personal income in 6 brackets, from 1.5% to 5.9% (2026, single filer). C corporations pay 5.9% of net income.

Sources checked 2026-10-20. Each figure links to the state or IRS page it comes from.

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