New Mexico Passes Legislation Including Social Security Tax Cuts, Child Tax Credit and Tax Rebates up to $500

Mandatory Credit: Photo by Jim Weber/AP/Shutterstock (12780548a)New Mexico Gov.
Jim Weber/AP/Shutterstock / Jim Weber/AP/Shutterstock

New Mexico became the latest state to exempt Social Security income from taxes when Gov. Michelle Lujan Grisham signed sweeping tax legislation on March 9.

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The bill, formerly know as House Bill 163, is expected to save New Mexico seniors $84 million over the next year by eliminating taxes on Social Security income, Grisham said in a press release. The bill also includes a cap for exemption eligibility of $100,000 for single filers and $150,000 for married couples filing jointly.

“New Mexicans, like all Americans, are feeling the pressure of rising costs,” she said. “Coupled with the state’s robust current financial situation, there is no reason we shouldn’t be taking every action to cut costs for New Mexican seniors, families and businesses — and today, we are doing just that.”

With New Mexico no longer taxing Social Security income, only 11 states remain that do so: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, Rhode Island, Utah, Vermont and West Virginia.

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House Bill 163 also includes 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 incomes under $75,000. These rebates will save New Mexico residents about $312 million, the governor’s office said.

Learn: How Claiming Social Security Early Will Affect Spousal Benefits
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Here are some of the other perks included in the bill:

  • A new refundable child tax credit of up to $175 per child, which will save New Mexico families $74 million annually.
  • 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.
  • An extension of the solar market tax credit, worth 10% of the purchase and installation cost of a solar power system.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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