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