Updated October 4, 2026. Quick answer: Yes, for New Mexico’s own plan. The 2025 PIT-ADJ instructions say “You can deduct contributions you made to the fund”, and “You may only deduct contributions to a Section 529 plan” that New Mexico approved. The instructions print no dollar limit.
What New Mexico allows for 529 contributions
| Item | What the documents say |
|---|---|
| Treatment | Deduction on Schedule PIT-ADJ |
| Limit | No dollar limit appears in the instructions |
| Plans that qualify | Only a Section 529 plan established and approved by the New Mexico Education Trust Board |
| Rollovers in | Amounts rolled over from a plan outside New Mexico count as contributions |
| Not-qualified withdrawals | Contributions deducted earlier that are refunded on closing the account, or rolled out to a plan New Mexico has not approved, are added back on PIT-ADJ line 3 |
| Source | New Mexico Taxation and Revenue Department, 2025 PIT-ADJ and instructions |
A $10,000 contribution by a married couple
A married couple who put $10,000 into a New Mexico-approved account for one child: the instructions state no dollar limit, so the documents read do not show a cap on the $10,000. Spouses who file separately may each claim one-half of the deduction allowed on a joint return.
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Rollovers and add-backs
The instructions say “Contributions include the principal and earnings of amounts rolled over” of amounts rolled over, and the add-back line asks you to “Enter the amount of qualified contributions refunded to you or” rolled out of the plan.
What the documents do not say
- Whether excess contributions carry forward to a later year.
- Whether the deduction has a dollar cap. The instructions state none, and the documents read do not mention one.
What changes in 2026
No change for tax year 2026 appears in the documents read for this page.
Federal rules
A state break sits beside the federal rules for 529 plans: the statute is 26 U.S.C. 529 and the IRS explains it in Publication 970, Tax Benefits for Education.
Common mistakes
- Contributing to another state’s plan and expecting the New Mexico deduction; the instructions name only the New Mexico-approved plan.
Related: how New Mexico taxes retirement income, whether New Mexico taxes pensions, the five questions behind any 529 state tax break, and the state-by-state table of 529 deductions.
Sources
- 2025 PIT-ADJ Instructions (New Mexico Schedule of Additions, Deductions, and Exemptions): https://realfile.tax.newmexico.gov/2025pit-adj-ins.pdf
- 2025 PIT-ADJ New Mexico Schedule of Additions, Deductions, and Exemptions: https://realfile.tax.newmexico.gov/2025pit-adj.pdf
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.