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Many changes in NM state taxes for 2022

By Terri HarBer roswell Daily recorD

There were some significant changes in laws that New Mexico taxpayers might be able to apply to their 2022 state income tax returns.

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Among those taxpayers affected are retired seniors, those who receive military pensions and full-time nurses, said Charles Moore, communications director for the New Mexico Taxation and Revenue Department.

New Mexico House Bill 163 eliminated most of the state’s tax on Social Security. It was signed by Gov. Michelle Lujan Grisham in March 2022 during the regular session and is estimated to save this group of taxpayers about $84 million in total.

Individuals earning less than $100,000 income, married couples filing jointly, heads of household, surviving spouses making less than $150,000 and married couples filing separately with income not reaching $75,000 won’t have to pay. So for most retirees “this is really big,” Moore said.

He explained that up until the 2022 tax year, New Mexico had been following the federal rules to tax this source of income: That is up to 85% of Social Security benefits could have been taxed if an individual’s combined income exceeded $25,000 and a couple’s income was more than $32,000, the Social Security Administration stated. New Mexico began taxing Social Security in 1990. About 450,000 of the state’s 2.1 million residents receive Social Security, the Associated Press reported.

Another break within this same tax law is an income exemption for armed forces retirees of up to $10,000 on their military retirement income in 2022. The amounts will increase in 2023 to $20,000 and in 2024 to $30,000.

There are about 141,500 people who have retired from the military living in the state. Veterans comprise nearly 9% of the state’s population, according to an economic impact report prepared for the New

Mexico Economic Development Department and released in July 2022.

Some changes could also help families and working people. For example, full-time hospital nurses will receive a one-time income tax credit of $1,000 on their state returns. “Even if that credit knocks down their payment to zero,” Moore emphasized.

People with low or moderate incomes are encouraged to look for credits. The Child Tax Credit is worth $175 on 2022 tax returns, for example.

Those who weren’t required to file 2021 state income tax returns because they didn’t earn enough money should consider doing so soon because they might be eligible for Household Relief payments.

Very low-income earners who missed the deadline to apply for 2022 relief payments to the state’s Human Services Department can file a 2021 income tax return by May 31, 2023, and still be eligible for a rebate.

Residents who aren’t required to file are those who make no more than $500 as an individual with no dependents and up to $1,000 as a couple or someone with dependents. “It can be beneficial,” Moore noted.

Moore also advises New Mexicans to do two things when they file.

Electronic filers are more likely to receive their refunds more quickly. And whether you’re sending your return electronically or in the mail, send the return as soon as possible.

Other features this year include a new checkbox on the state’s tax return that allows the Taxation and Revenue Department to share care information taxpayers supply with the state’s Human Services Department to find out whether they qualify for Medicaid. There will be another box to check if someone is interested in compliant, low-cost health care plans.

For more information, see tax.newmexico.gov.

Reporter Terri Harber can be reached at 575-622-7710, ext. 308. or reporter03@ rdrnews.com.

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