Home New mexico tax How much money will New Mexicans get in tax refunds?

How much money will New Mexicans get in tax refunds?

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SANTA FE, NM (KRQE) — Anywhere between $500 and $1,500 will hit most New Mexicans’ bank accounts over the next five months. The state government’s ‘free money’ comes after New Mexico lawmakers passed two separate economic aid packages this year amid record oil revenues and rising costs of living, including including high gasoline prices.

So how much money could you see in your own account? In an effort to help you figure it out, KRQE News 13 breaks down the various stimulus packages that state lawmakers have allowed to come out in 2022.

Some of the money comes from a bill passed by lawmakers in a regular legislative session in February 2022. Lawmakers also passed a second package on April 5, 2022, after meeting in Santa Fe to a one-day special legislative session.

While Governor Michelle Lujan Grisham has yet to sign the latest legislation passed on April 5, she is expected to approve the measure. We’ll start with the money from House Bill 2 of the special session.

Two-part tax refunds: $500 to $1,000 split into two installments

House Bill 2 of the special session provides for payments of $500 or $1,000 for new Mexicans which will be divided into two parts. The amount you receive will depend on your tax status.

Heads of families, surviving spouses and married individuals who file joint returns will receive a total of $1,000. Single filers and married people filing taxes separately will receive a total of $500.

Again, these payments will be split into two parts. The first payment is supposed to arrive “as soon as possible”. The legislation officially describes its delivery as “no later than June 30, 2022.”

Joint filers will receive $500 for the first payment. Single filers will receive $250 for the first payment.

The second payment of the two-part rebate will occur during the month of August. As with the first payment, the amount you get depends on the status of the deposit. Joint filers will receive $500 and individual filers will receive $250.

Does everyone get discounts in HB2?

For the most part, yes. State lawmakers declined to include income limits in House Bill 2, which means the state will provide cash payments to people regardless of income.

Can people who don’t file their taxes get a refund?

If you don’t make enough money to file your taxes, you can still get money from the state. House Bill 2 provides for a so-called “relief payment” to fill in the gaps. There is also an application process and a limited amount of money the government will send.

Relief payments for non-filers are on a first-come, first-served basis. And they will only last until a $20 million fund runs out. Applicants will be required to provide a social security number or individual state tax identification number as proof of identification.

The relief payment will be the same amount as the two-part refund. $1,000 will go to households of married couples or singles with one or more dependents. For single households with no dependents, the payment is $500.

Only people who do not qualify for the standard two-part refund will qualify for the so-called “relief payment” for non-filers. And you must be at least 18 for part of 2021 to qualify. Dependents are not eligible for payment.

To get a relief allowance, if you qualify, you will need to file an application with the Department of Social Services. The department plans to announce the application process in the coming weeks, according to Jodi McGinnis Porter, director of communications for the Department of Human Services.

House Bill 2 says if people apply by May 31, 2022, they can expect payment no later than the end of July.

What if I have tax debts? Will I still receive payment?

If you owe the state, you may not see the funds arrive in your bank account. Instead, the payments will likely be intercepted by the Department of Taxes and Revenue to be used to pay off your debt.

So the funds will always help your accounts in the end. But you’ll have less personal control over exactly how the funds are used. If there are repayment funds left after the state pays off your debt, you will be refunded the extra.

It should be noted that a similar refund interception happened to some people who received state tax refund checks in 2021. At the time, about 2.7% of the 2021 tax relief was intended for debt repayment, according to the LFC.

Will rebates affect the tax bracket I’m in?

No. The two-part rebates will not be counted in adjusted federal or state gross income, according to a tax report from LFC. This will therefore not affect your tax bracket.

For the same reason, the tax refund also won’t affect eligibility for income-based support programs at the federal or state level, according to the LFC. But the discounts could impact your eligibility for privately funded support, depending on how those private support providers determine who is eligible.

You mentioned another refund legislator passed in regular session? Is it still on the way?

Yes! Earlier this year, lawmakers approved House Bill 163, which includes rebates. These discounts also have income limits, so fewer people will receive them.

The bill gives single or married people who file separately a $250 tax refund if they earn less than $75,000 a year. Married people and certain other New Mexicans qualify for a $500 rebate if they earn less than $150,000 a year.

These rebates are expected to be distributed in July 2022, according to the state. The $250 or $500 discounts from HB 163 will be in addition to the $500 or $1,000 discounts given as part of HB 2 during the special session.

I also heard about a new child tax credit in New Mexico, what is it?

Bill 163 in the 2022 regular state session also approved a child tax credit. This credit is on a sliding scale from $25 to $175 per child. The amount you receive depends on your adjusted gross income. If you earn less than $25,000 per year, you would be entitled to $175 per child. If you earn between $75,000 and $100,000, you are entitled to $100 per child.

The child tax credit begins January 1, 2023. To obtain the credit, New Mexico residents will need to apply with the Department of Taxes and Revenue. If approved, you will not receive a check per child, but rather the credit will be applied to what you pay in taxes.

Are there other older tax credit or refund programs?

In addition to the credits and rebates enacted this year, the state continues to operate certain rebate programs enacted in previous years. For example, in 2019, state legislators created a tax deduction for dependents. That deduction is about $28 million a year, according to the LFC.

In addition to state programs, there are also federal credits. For example, the Department of Social Services notes that some people may still be able to receive a 2021 child tax credit — but you must file your taxes by April 18, 2022 to receive the credit.