Live in Idaho, Work Remotely for a New Mexico Employer: Who Taxes You?
Answer
One state, one return: Idaho. New Mexico has no wage income tax, so working there changes nothing about what you owe. Your Idaho resident return reports the New Mexico income along with everything else, and there is no credit to claim because New Mexico charged you nothing.
Last verified
The instinct that working in a no-tax state means paying no tax is the single most expensive misunderstanding in this niche. New Mexico takes nothing, but Idaho still taxes residents on income earned anywhere, so the full amount lands on your Idaho return.
What you file
- 1Resident return · Idaho
File a Idaho resident return reporting all of your income.
The two states, side by side
| Idaho | New Mexico | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form 43 | Form PIT-1 with Schedule PIT-B |
| Credit for other-state tax | Form 39NR | Form PIT-1 (credit for taxes paid to another state) |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | Idaho State Tax Commission | New Mexico Taxation and Revenue Department |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in New Mexico and working in Idaho gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Idaho → New MexicoBoth states — credit offsets the double tax
- 1099 contractor: Idaho → New MexicoHome state, plus the client state if you work there
- Moved mid-year: Idaho → New MexicoTwo part-year returns
Other Idaho pairs
Questions people actually ask
I live in Idaho and work remotely for a New Mexico employer. Which state do I pay?
One state, one return: Idaho. New Mexico has no wage income tax, so working there changes nothing about what you owe. Your Idaho resident return reports the New Mexico income along with everything else, and there is no credit to claim because New Mexico charged you nothing.
Which state should my employer be withholding for?
Idaho. Your employer should withhold Idaho tax rather than New Mexico tax on these wages. If a New Mexico line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my New Mexico employer's location alone create a New Mexico tax obligation?
No. New Mexico sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside New Mexico are a different matter — those are New Mexico-source income and can require a nonresident return.
How current is this?
The Idaho and New Mexico rules on this page were last checked against Idaho State Tax Commission and New Mexico Taxation and Revenue Department on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Idaho State Tax Commission — individual income taxaccessed 2026-08-07
- New Mexico Taxation and Revenue Department — individual income taxaccessed 2026-08-07