My spouse did some work for Operation Bandana New Mexico last year, a nonprofit that makes face masks to donate to schools, etc. She got a 1099-NEC as expected with the income reported in box 1. However, this is the only box of the seven numbered boxes that have anything in them. Box 7 "State income" is blank, as are box 5 and box 6 (other state information).

This seems to indicate to me that none of this amount should be reported to the state (I reside in New Mexico) or is subject to paid taxes. Is this correct?

Is it possible to have a 1099-NEC this way? Is there something special about state income tax in New Mexico when contracting with a nonprofit? Is Operation Bandana New Mexico (which I believe is a state-funded or state-initiated thing in some way) special in some way? Or is this an error on my tax form? (The nonprofit used an outside accounting company to generate these tax documents, so at least it would seem professional accountants have put this together.)