Bill > HB264

This bill introduces several changes to New Mexico's income tax laws, aiming to provide new deductions and credits while modifying existing ones. It establishes new income tax deductions for qualified tips, qualified overtime compensation, and Social Security income that is already deductible under federal law, referencing specific sections of the U.S. Internal Revenue Code (26 U.S.C. 224, 225, and 151 respectively) for definitions. The bill also repeals the Working Families Tax Credit and enacts a new Earned Income Tax Credit (EITC), which is a refundable tax credit for low-to-moderate income working individuals and families, with amounts varying based on income and the number of qualifying children, and includes provisions for inflation adjustments. A new Foster Parent and Guardian Income Tax Credit is created, offering a credit of $250 per month for eligible foster parents and guardians, capped at $3,000 annually, and this credit is available until January 1, 2032. Additionally, the bill expands the existing income tax deduction for unreimbursed medical care expenses to all income levels, removing previous income-based limitations and allowing for the deduction of the full amount of eligible medical expenses. Finally, it extends and amends a gross receipts tax deduction for health care practitioners, allowing them to deduct receipts from coinsurance payments made by patients, and this extension is in effect until July 1, 2032. These changes, with the exception of the gross receipts tax deduction amendment, generally apply to taxable years beginning on or after January 1, 2026.

Budget and Finance, Health and Social Services

https://www.nmlegis.gov/Legislation/Legislation?chamber=H&legtype=B&legno=264&year=26