NM’s tax landscape changed this year — make sure you know what you’re eligible for - Albuquerque Journal

NM’s tax landscape changed this year — make sure you know what you’re eligible for

With record amounts of tax revenue in the state of New Mexico, there is more to know about tax changes and rebates for New Mexicans. Bills passed during the regular and special session affect taxes in 2021, 2022 and beyond. What follows is a roundup of the new state laws and programs, but this is not tax advice; see a tax resource for more information.

For 2021

Tax Rebates

• The one-time, refundable rebates will be $500 for married couples filing joint returns with incomes under $150,000, and $250 for single filers with income under $75,000. The rebates will be sent automatically to qualifying taxpayers who have filed a 2021 Personal Income Tax (PIT) return. No application is required.

• A refundable income tax rebate for all taxpayers of $500 for single filers and $1,000 for joint filers. The rebate will be split into two equal payments, one in June 2022 and one in August 2022. The rebates will be sent automatically to taxpayers who have filed a 2021 PIT return. No application is required.

If you owe state taxes, the rebates may be used to offset any liability in the 2021 tax year return before issuing a rebate to you.

Low-income New Mexicans who are not required to file a return may also be eligible for such refundable tax credits and rebates as the Low-Income Comprehensive Tax Rebate. Refundable credits and rebates can result in a refund for filers, even if they have no tax liability. Low-income filers who have no tax liability can still file without penalty. Applications will be available on the YES-NM website at www.yes.state.nm.us beginning at 8 a.m. May 2.

Relief payments

• New Mexicans who do not file taxes will be able to apply for relief payments starting at 8 a.m. May 2. Relief payments will be issued on a first-come, first-served basis, and will be made no later than July 31. The deadline to apply for a relief payment is 5 p.m. May 31, but applications may be closed before May 31 if available funds run out.

To apply for a relief payment from the Human Services Department, go to the YES-NM website at www.yes.state.nm.us starting May 2. The application will be available in both English and Spanish.

Working Families Tax Credit (WFTC)

• As part of House Bill 291, the WFTC is worth 20% of the federal Earned Income Tax Credit (EITC). It is based on family size and income. For taxpayers between the ages of 18 and 25 with or without children, this change was made permanent in HB 291.

Low-Income Comprehensive Income Tax Rebate (LICTR)

• This is also part of House Bill 291 and is now available to taxpayers with up to $36,000 in modified gross income. According to the Department of Taxation and Revenue, if you have already filed, including the LICTR, no further actions is needed. If you did not claim this rebate, you can file an amended return.

For 2022 and beyond

Credit for nurses

• A taxpayer who is not a dependent of another individual and who was employed full time as a nurse at a hospital located in New Mexico may apply for a tax credit against the taxpayer’s tax liability. The amount of tax credit allowed for taxable year 2022 is $1,000.

Child Income Tax Credit

• For taxable years beginning January 1, 2023, and prior to January 1, 2032, a taxpayer who is a resident and is not a dependent of another individual may apply for a credit against the taxpayer’s tax liability imposed for each qualifying child of the taxpayer. Credit ranges from $25 to $175 per child, depending on income.

Exemption for armed forces retirement pay

• There’s now an income tax exemption for armed forces retirees, starting at $10,000 of military retirement income in 2022 and gradually rising to $30,000 of retirement income in tax years 2024 through 2026.

Exemption for Social Security income

• Effective for 2022 tax year, New Mexico will exempt Social Security retirement income from taxation for individual retirees who make less than $100,000 annually. The income cut-off is $75,000 for married individuals filing separate returns and $150,000 for heads of household, surviving spouses and married individuals filing joint returns.

Gross Receipts Tax

• Similar to a sales tax, but applied to most goods and services, the Tax and Revenue Department’s Gross Receipts and Compensating Tax Rate Schedules show a reduction of 0.125 percentage points in July 2022 and again in 2023.

Did you know?

• Anyone who reaches 100 years of age is exempt from personal income tax in New Mexico if that person is not claimed as a dependent by another taxpayer? FYI, a spouse is not a dependent. (See Bulletin B300.3)

Source: NM Department of Taxation and Revenue www.tax.newmexico.gov/

 

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