Jim Weber/AP/Shutterstock / Jim Weber/AP/Shutterstock
New Mexico became the latest state to exempt Social Security income from taxes when Governor Michelle Lujan Grisham signed sweeping tax legislation on March 9.
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The bill, formerly known as House Bill 163, is expected to save New Mexico seniors $84 million over the next year by eliminating Social Security income taxes, Grisham said in a press release. The bill also includes an exemption eligibility cap 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 current strong fiscal position, there’s no reason we shouldn’t take all the necessary steps to reduce costs for New Mexico seniors, families and businesses — and today, that is exactly what we are doing.
New Mexico no longer taxes Social Security income, down to 11 states that do: 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 refund of $500 for married couples filing joint returns with incomes below $150,000 and $250 for single filers with incomes below $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 benefits 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 holiday for armed forces retirees, starting at $10,000 of military retirement income in 2022 and reaching $30,000 of retirement income in the 2024 tax year.
- A one-time refundable tax credit of $1,000 for the 2022 tax year for full-time hospital nurses.
- An extension of the Solar Marketplace Tax Credit, worth 10% of the cost of purchasing and installing a solar energy system.
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