The bill amends Section 7-3-3 of the New Mexico Statutes to allow employers with fifty or fewer employees the option to not withhold income tax from their employees' wages. Specifically, it introduces a new provision stating that these smaller employers may elect not to withhold amounts from their employees' wages, provided they notify the state department and inform their employees of this decision. This change aims to ease the tax burden on small businesses and their employees by allowing them to manage their tax payments more flexibly.

Additionally, the bill retains existing provisions regarding withholding requirements for other categories of employees, such as non-residents working in New Mexico for a limited number of days and cases where the withheld amount is less than one dollar. The new provisions will take effect for taxable years beginning on or after January 1, 2026, allowing time for employers to adjust to the new regulations.

Statutes affected:
introduced version: 7-3-3