New Mexico has a state-level EITC, called the Working Families Tax Credit (WFTC). The state credit is worth 10 percent of the federal credit, is also refundable, and is available to most filers who qualify for the EITC. In 2011 alone, the WFTC returned almost $49 million to New Mexico’s low-income working families.
New Mexico EITC Working Families Tax Credit (WFTC)
A refundable tax credit has been added. It totals ten percent of the federal earned income tax credit for which a taxpayer is currently eligible. There is also an exemption for low-and middle-income taxpayers that is based upon adjusted gross income. To qualify you must have an adjusted gross income of $27,500 or less if you are married and filing separately, $36,667 or less for single individuals, or $55,000 or less for married individuals filing jointly
Claiming New Mexico Working Families Tax Credit
If you live in New Mexico and you claim the federal Earned Income Tax Credit, you can also claim the New Mexico Working Families Tax Credit. The Working Families Tax Credit for New Mexico residents equals 10% of the federal EITC amount. The New Mexico state tax credit is 10% over and above the EIC that you get from the federal government.
Claiming New Mexico EITC
Example: If you live in New Mexico and you claim a $1,000 Earned Income Credit on your federal tax return, you can claim an additional 10% of this amount, equal to $100 ($1,000 x .10 = $100), on your New Mexico state income tax return.
Does New Mexico offer a tax break to retirees?
Yes. Depending on income level, taxpayers 65 years of age or older may be eligible for a deduction from taxable income of up to $8,000 each. Low-income taxpayers may also qualify for a property tax rebate even if they rent their primary residence. Beginning with tax year 2002 persons 100 years of age or more who are not dependents of other taxpayers are exempt from filing and paying New Mexico personal income tax.
New Mexico Medical Expense Exemption
The state also provides an income tax exemption of up to $3,000 to those 65 and older for medical expenses for either that person or his or her spouse or dependents. The expenses must exceed $28,000 and must not be reimbursed or compensated by other means like health insurance or Medicaid. That same taxpayer may also claim an additional refundable credit of up to $2,800 for unreimbursed or uncompensated medical expenses