Live in New Mexico, Work in Connecticut: Which State Taxes Your Paycheck?
Answer
You file twice: Connecticut first, then New Mexico. There is no reciprocity agreement between these two states, so Connecticut taxes the income where it was earned and New Mexico taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.
Last verified
Two states can lawfully tax the same wages: Connecticut because the work happened there, New Mexico because you live there. Nothing prevents the overlap in advance — it is unwound afterwards, on the New Mexico return, through the credit for taxes paid to another state.
A New Mexico resident taxed by another state on the same income claims the credit for taxes paid to other states on Form PIT-1 (credit for taxes paid to another state). The credit is capped at the New Mexico tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
What you file
- 1Nonresident return · ConnecticutForm CT-1040NR/PY
File the Connecticut nonresident return FIRST — you need the Connecticut tax figure before you can complete New Mexico.
- 2Resident return · New MexicoForm PIT-1 (credit for taxes paid to another state)
File a New Mexico resident return reporting all income, then claim the credit for tax paid to Connecticut. The credit is capped at what New Mexico would have charged on that same income, so if Connecticut taxes it at a higher rate the difference is not refunded.
The two states, side by side
| New Mexico | Connecticut | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | Only against convenience-rule states |
| Nonresident return | Form PIT-1 with Schedule PIT-B | Form CT-1040NR/PY |
| Credit for other-state tax | Form PIT-1 (credit for taxes paid to another state) | Schedule 2 (Form CT-1040) |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | New Mexico Taxation and Revenue Department | Connecticut Department of Revenue Services |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Connecticut and working in New Mexico gives:Both states — credit offsets the double tax.
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.
- Remote worker: New Mexico → ConnecticutHome state only
- 1099 contractor: New Mexico → ConnecticutHome state, plus the client state if you work there
- Moved mid-year: New Mexico → ConnecticutTwo part-year returns
Other New Mexico pairs
Questions people actually ask
I live in New Mexico and work in Connecticut. Which state takes the tax out of my paycheck?
You file twice: Connecticut first, then New Mexico. There is no reciprocity agreement between these two states, so Connecticut taxes the income where it was earned and New Mexico taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.
Which state should my employer be withholding for?
Connecticut. The wages are sourced to Connecticut, so Connecticut withholding is correct and there is no New Mexico withholding to set up.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. New Mexico gives residents a credit for tax paid to Connecticut on the same income, claimed on Form PIT-1 (credit for taxes paid to another state). The credit is capped at the New Mexico tax on that income, so if Connecticut taxes it more heavily the excess is not refunded by either state.
How current is this?
The New Mexico and Connecticut rules on this page were last checked against New Mexico Taxation and Revenue Department and Connecticut Department of Revenue Services 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.
- New Mexico Taxation and Revenue Department — individual income taxaccessed 2026-08-07
- Connecticut Department of Revenue Services — individual income taxaccessed 2026-08-07