Tax reform legislation introduced in New Mexico would adopt market-based sourcing and enact a new personal income tax deduction. The tax reform also extends to gross receipts and compensating taxes.
New Dependent Deduction
If enacted, the bill would create a new personal income tax deduction for dependents, as long as the federal exemption amount under IRC Sec. 151 remains zero. The deduction from net income would be calculated as follows:
– for head of household, $4,000 multiplied by the difference between the number of dependents claimed minus one; or
– for married filing jointly, $4,000 multiplied by the difference between the number of dependents claimed minus two.
The new deduction would be effective for tax years beginning on and after January 1, 2019.
H.B. 579, Introduced in the New Mexico Legislature on February 13, 2019