The bill eliminated taxation on social security, saving New Mexico seniors more than $84 million next year. The bill includes a cap for exemption eligibility of $100,000 for single filers and $150,000 for married couples filing jointly.
In addition, House Bill 163 cuts the state’s gross receipts tax rate by an eighth of a percent starting July 1, 2022, and ramps up to a quarter-percent reduction on July 1, 2023. This will save business owners millions of dollars across the state.
House Bill 163 also includes:
- A new refundable child tax credit of up to $175 per child
- A one-time, refundable income tax rebate of $500 for married couples filing joint returns with incomes under $150,000, and $250 for single filers with income under $75,000
- A three-year income tax exemption for armed forces retirees, starting at $10,000 of military retirement income in 2022 and rising to $30,000 of retirement income in tax year 2024
- A one-time $1,000 refundable income tax credit for tax year 2022 for full-time hospital nurses (aka "heroes!")
- An extension of the solar market tax credit, worth 10% of the purchase and installation cost of a solar power system
- A new gross receipts tax deduction for certain professional services sold to manufacturers, which will help reduce tax “pyramiding” by about $5 million per year and make New Mexico businesses more competitive
The intention is to put more money back into the pockets of families with the Child Income Tax Credit, protecting the financial stability of our retired veterans and our low and middle-income senior citizens by cutting or eliminating their state income tax. They also hope to give a boost local businesses and attract investment by cutting the gross receipts tax.