What are Refunded Section 529 College Savings Contributions?

If you closed a New Mexico-approved Section 529 college savings plan account, enter the amount of refunded contributions you received during the tax year from this account.

Enter contributions rolled over from a New Mexico-approved Section 529 college savings plan account to a Section 529 college savings plan account that was not approved by New Mexico. Do this only if you deducted these contributions on Schedule PIT-ADJ from an earlier New Mexico personal income tax return.

Do NOT include earnings refunded to the investor, earnings rolled over from a New Mexico-approved Section 529 college savings plan account to a Section 529 college savings plan that was not approved by New Mexico, or qualified distributions from the account.

What is qualified Native American income?

If you or your spouse, or both, were enrolled members of a federally recognized New Mexico Indian nation, tribe or pueblo, your income is exempt from base income if BOTH of the following apply:
  • You lived on the land of the Indian nation, tribe, band or pueblo of membership when you earned it.
  • You earned that income on the lands of that nation, tribe, band or pueblo.
CAUTION: Income earned off the lands of your own or your spouse's nation, tribe, band or pueblo is subject to New Mexico income tax no matter where you live.

Military pay of an enrolled member is exempt only when the home of record is on the member's own Indian nation, tribe, band, or pueblo lands.

Retirement or pension income is exempt only when BOTH of the following apply:
  • The enrolled member lives within the boundaries of the member's nation, tribe or pueblo.
  • The retirement or pension is the result of employment on the member's Indian nation, tribe, or pueblo.
Retirement or pension income from employment off the lands of the nation, tribe, band, or pueblo may not be exempt.

Do I qualify to deduct income if I'm 100 years or older?

The income of a person 100 years old or older is exempt from New Mexico income tax if the centenarian cannot be claimed as a dependent by someone else.

To qualify, you must be 100 years or older at the end of the tax year for which you claim the exemption.

Unmarried centenarians do not need to file a return unless they want to claim rebates and credits available for low-income filers.

Married Centenarians

New Mexico is a community property state. Rules are different for married 100-year-olds. Married centenarians filing jointly or separately may exempt half of all community income and all of the centenarian's separate income. If you report an exemption for more, or less, than 50% of total joint income, attach a statement showing a correct division of community and separate income and payments.

Persons 100 years old or older may not claim combined exemptions and deductions for more than 100% of income.

Who qualifies to claim the Medical Savings Account exemption?

If you or your spouse are enrolled in a New Mexico Medical Care Savings Account (NMMSA) established by an employer, and during 2014 you made or received contributions to the account or made or received distributions from the account, you may be entitled to claim a New Mexico medical care savings account exemption.

An NMMSA is a tax-exempt trust or custodial account set up by a self-employed individual or a small employer that maintains a high deductible individual or family health plan. The funds from the NMMSA are used to pay the employee's unreimbursed medical care expenses. To qualify for the exemption, the qualified contributions or distributions may not be excluded, exempted, or deducted from federal taxable income.

Principal contributed to an NMMSA, interest earned on an NMMSA, money paid for eligible medical expenses from funds in an NMMSA, or money advanced to the employee by the employer for eligible medical expenses pursuant to the Medical Care Savings Account Act are exempt from New Mexico income tax.

Caution: Generally, qualified contributions and earnings are excluded, exempted, or deducted from federal adjusted gross income and distributions paid for eligible medical expenses are excluded, exempted, or deducted from federal taxable income. You may not claim the exemption from New Mexico taxable income if your qualified contribution or distribution is excluded, exempted, or deducted from federal taxable income.

Do not include excess contributions, unqualified distributions, or money rolled over into another MSA.

Which contributions to a New Mexico approved Section 529 college savings plan can be deducted?

Deduct the sum of contributions you made during the tax year to your New Mexico approved Section 529 college savings plan(s). You may also deduct the principal and earnings portion of amounts rolled over to a New Mexico approved Section 529 college savings plan account from a Section 529 college savings plan that is not approved by New Mexico.

NOTE: You may only deduct contributions to a Section 529 Plan established and approved by the New Mexico Education Trust Board. See the Bulletin on New Mexico Income Tax and Your Education Trust (529) Plan, from the Department's website.

A husband and wife who file separate returns may each claim half the deduction allowed on a joint return.

Who is eligible for the Armed Forces Active Duty Pay deduction?

Enter the pay, wages, or salaries paid to you or your spouse for U.S. Armed Forces active duty service if it was included in your federal adjusted gross income. This exemption from state income tax applies to residents and nonresidents of New Mexico.

Active duty, as defined in 37 USC 101, means full-time duty in active service, and includes the following:
  • Full-time training duty
  • Annual training duty
  • Full-time National Guard duty
  • Attendance, while in the active service, at a school designated as a service school by law or by the Secretary concerned.
Armed forces includes the Army, Navy, Air Force, Marine Corps, and Coast Guard. Pay, wages, or salaries paid by the U.S. Public Health Service does not qualify for the exemption.

Who is eligible for the medical care expense exemption for persons age 65 years or older?

If you or your spouse is 65 years of age or older and you paid unreimbursed and uncompensated medical care expenses of $28,000 or more during tax year 2014, you may claim an exemption of $3,000.

The medical care expenses may be made for the care of any combination of yourself, your spouse or dependents. The deduction is allowed for out-of-state residents with income tax responsibility to New Mexico. However, when medical expenses are incurred for services provided by a medical doctor, osteopathic physician or psychologist, the person providing the service must be licensed or certified to practice in New Mexico.

If you are eligible to claim the medical care expense exemption for persons age 65 years or older, you are also eligible to claim the Refundable Medical Care Credit for Persons 65 Years or Older, allowing an additional tax benefit. See the New Mexico Refundable Credits screen.

The types of medical expenses that you may include are described in this portion of the PIT-1 instructions with one exception. You may also include unreimbursed and uncompensated medical care expenses which have been included in itemized deductions on Schedule A, federal Form 1040.

Which organ donation expenses can I enter?

Human organs are defined as all or part of a heart, liver, pancreas, kidney, intestine, lung, or bone marrow.

Enter any human organ donation-related expenses, not more than $10,000, including lost wages, lodging, and travel expenses incurred during the taxable year by the taxpayer or the taxpayer's dependent.

A husband and wife who file separate returns for a tax year in which they could have filed a joint return may each claim only one-half of the deduction that would have been allowed on a joint return.

What are National Guard Life Insurance Reimbursements?

An individual who receives a reimbursement from the National Guard Service Member's Life Insurance Reimbursement Fund may claim a personal income tax exemption in the amount of the reimbursement.

The reimbursements are issued by the New Mexico Office of Military Affairs, which sends each recipient a Form 1099-MISC for the reimbursement. Attach the Form 1099-MISC to support the New Mexico National Guard member life insurance reimbursements tax exemption claimed.

What are eligible medical expenses?

For purposes of the Medical Care Expense Deduction, you may claim only unreimbursed and uncompensated medical expenses that were:

  • Part of the up to 10% (or 7.5% if over 65) of federal AGI which is excluded from your itemized medical deduction, or
  • Not included in itemized deductions either because you didn't itemize your deductions on the federal return, or because you didn't include some eligible expenses in your itemized medical expense deductions
Reimbursed and compensated insurance premiums like those paid with pretax dollars under cafeteria and similar benefit plans are also ineligible. Some of the expenses you may include are:
  1. Amounts paid as premiums under Part B of Title XVIII of the Social Security Act (Medicare)
  2. Amounts paid for a qualified long-term care insurance contract defined in Section 7702B(b) of the Internal Revenue Code
  3. Unreimbursed insurance premiums and co-payments not deducted for federal purposes. NOTE: Premiums paid with pretax dollars through payroll deductions are not eligible.

For purposes of this deduction:
  1. "Health Care Facility" means a hospital, outpatient facility, diagnostic and treatment center, rehabilitation center, free-standing hospice, physician's office, or other similar facility, regardless of location, where medical care is provided and which is licensed by any governmental entity;
  2. "Medical Care" means the diagnosis, cure, mitigation, treatment or prevention of disease, or care for the purpose of affecting any structure or function of the body;
  3. "Medical Care Expenses" means amounts paid for:
    • The diagnosis, cure, mitigation, treatment or prevention of disease, or care for the purpose of affecting any structure or function of the body, if provided by a physician or in a health care facility. Cosmetic surgery is not eligible;
    • Prescribed drugs or insulin, and oxygen. A "prescribed drug" is a drug or biologically active substance for use in or on humans that requires a prescription or administration by a person licensed to do so. Costs for over-the-counter drugs are not eligible. Prescribed drugs for animals are not eligible;
    • Qualified long-term care services as defined in Section 7702B (c) of the Internal Revenue Code;
    • Insurance covering medical care, including amounts you paid as premiums under part B of Title XVIII of the Social Security Act (Medicare) or for a qualified long-term care insurance contract defined in Section 7702B (b) of the Internal Revenue Code, if the insurance or other amount is income for the tax year;
    • Nursing services, regardless of where the services are rendered, if provided by a practical nurse or a professional nurse licensed to practice in the state according to the Nursing Practice Act;
    • Specialized treatment or the use of special therapeutic devices if a physician prescribes the treatment or device, and the patient can show that the expense was incurred primarily for the prevention or alleviation of a physical or mental defect or illness. "Special therapeutic devices" include corrective eyeglasses, contact lenses and hearing aids prescribed by a physician. Expenses for guide dogs, however, are excluded;
    • Care in an institution other than a hospital, such as a sanitarium or rest home, if the principal reason for the presence of the person in the institution is to receive the medical care available. If the meals and lodging are a necessary part of such care, the cost of the meals and lodging are "medical care expenses."
  4. "Physician" means a medical doctor, osteopathic physician, dentist, podiatrist, chiropractic physician or psychologist licensed or certified to practice in New Mexico.

Physicians licensed or certified to practice in New Mexico are recognized. Also qualified are licensed practical nurses and registered professional nurses licensed in New Mexico. Costs of care provided by other health care professionals such as physical therapists, acupuncturists and others licensed by the New Mexico Department of Health are deductible only if the care was provided in their offices or at other qualified health care facilities.

An exception to the requirement for the doctor to be licensed or certified in New Mexico, applies when the medical expenses are for qualified long-term care services as defined in Section 7702B (c) of the Internal Revenue Code.

Keep full documentation of all medical care expenses for which you claim a deduction on this line. Do not send the documentation with your tax return. Keep your receipts in case you are selected for audit or verification of deductions claimed.

Married couples filing separately may claim only those expenses personally incurred. They may not claim any expenses the spouse has already claimed or plans to claim.

Do not claim payments to a veterinarian or veterinary clinic or any other expenses for family pets or other animals.

Who qualifies as an adopted special needs child?

You may claim the Special Needs Adopted Child Credit if all of the following apply:
  • You file a New Mexico personal income tax return.
  • You are not a dependent of another taxpayer.
  • You have adopted a special needs child.
  • The special needs adopted child is claimed as a dependent on your federal return.
A "special needs adopted child" means an individual who may be over 18 years of age and who is certified by the Children, Youth, and Families Department or a licensed child placement agency as meeting the definition of a "difficult to place child" pursuant to the Adoption Act, and the classification is based on physical or mental impairment that is at least moderately disabling.

In the first year you claim the special needs adopted child tax credit for a qualifying adopted child, you will need to attach a copy of the certificate issued by the Children, Youth, and Families Department or the licensed child placement agency for each child you adopted in that year.

If you claimed the exemption for adoption of special needs children for a qualifying adopted child in a prior year, you do not need to attach the supporting documentation to the return. Maintain the documentation in your files.

Note: Effective January 1, 2007, the exemption for adoption of special needs children has been repealed, and a new special needs adopted child tax credit has been created. Those who previously claimed the exemption may qualify for the new credit.

Who is eligible for the Low-Income Property Tax Rebate?

The property tax rebate may not be more than $350 ($175 if Married Filing Separately).

You do not have to be 65 or older to be eligible for this rebate. If you are a Los Alamos or Santa Fe county resident who is age 65 or older on the last day of the tax year, you may be eligible for this rebate AND the Property Tax Rebate for Persons 65 or Older. You must attach a property tax statement to your return if the mailing address on your 2014 Form PIT-1 is not a Los Alamos or Santa Fe county address.

To qualify for the rebate, you must meet ALL of the following requirements:
  • Had a principal place of residence in Los Alamos or Santa Fe county
  • Had a modified gross income of $24,000 or less
  • Was a resident of New Mexico during the tax year
  • Was physically present in New Mexico for at least six months during 2014
  • Was neither eligible to be claimed, nor actually claimed, as a dependent of another taxpayer for 2014
  • Was not an inmate of a public institution for more than six months during 2014
This rebate is for the property tax billed during tax year 2014 on your principal place of residence in New Mexico. There is no property tax rebate for property that is not already subject to property tax.

What is the definition of "principal place of residence?"

Your principal place of residence is the dwelling and related structures you own and occupy, and only the amount of land surrounding it reasonably necessary to use the dwelling as a home. For purposes of this rebate, a principal place of residence does not include rented land or structures. The surrounding land may not be more than five acres.

If you have more acreage than is reasonably necessary to maintain a dwelling, adjust the amount of property tax billed to reflect the principal place of residence only. Only this smaller amount may be used to calculate the tax rebate.

Who is eligible for the Refundable Medical Care Credit?

If you or your spouse is 65 years of age or older and you paid unreimbursed and uncompensated medical care expenses of $28,000 or more during tax year 2014, you may claim a tax credit of $2,800. The medical care expenses may be for the care of any combination of yourself, your spouse or dependents. The tax credit is allowed for out-of-state residents with income tax responsibility to New Mexico.

Married couples filing separate returns may each claim one-half of the credit that would have been allowed on a joint return.

If you are eligible to claim the Refundable Medical Care Credit for Persons Age 65 Years or Older, you are also eligible to claim the Medical Care Expense Exemption for Persons 65 Years or Older, allowing an additional tax benefit. See the Subtractions from Income page.

The types of medical expenses that you may include are described in the instructions for Form PIT-1, Line 13 with the following exception. You may also include the portion of unreimbursed and uncompensated medical care expenses which have been included in itemized deductions on Schedule A, federal Form 1040.

How will contributions to the Share with Wildlife Program be used?

This program, administered by the New Mexico Game and Fish Department, assists nongame or endangered species. Ninety percent (90%) of donations go directly to benefit wildlife through research, habitat protection, public education, and wildlife rehabilitation.

Contact:
Share with Wildlife
P.O. Box 25112
Santa Fe, NM 87504-5112
(505) 476-8111 or (505) 476-8101

How will contributions to the Veterans' National Cemetery Fund be used?

The New Mexico Department of Veterans Services administers this fund to increase the size of the Santa Fe National Cemetery. The commission sends contributions that the Veterans' National Cemetery Fund has received since it began in excess of $1,070,000 to the Substance Abuse Education Fund.

Contact:
New Mexico Department of Veterans Services
407 Galisteo Street, Room 142
Santa Fe, NM 87504-2324
(505) 827-6300

How will contributions to the Substance Abuse Education Fund be used?

The New Mexico Public Education Department administers the fund for substance abuse education programs in New Mexico schools.

Contact:
New Mexico Public Education Department, School Health Unit
120 S. Federal Place, Room 206
Santa Fe, NM 87501
(505) 827-1804

How will contributions to the Forest Re-Leaf Program be used?

The Forestry Division of the New Mexico Energy, Minerals and Natural Resources Department administers this fund through the Conservation Planting Revolving Fund. Donations help a tree planting grant program for New Mexico communities.

Contact:
New Mexico Forestry Division
1220 S. St. Francis Drive
Santa Fe, NM 87505
(505) 476-3332

How will contributions to the National Guard Member and Family Assistance Fund be used?

Contributions will be distributed to the Secretary of the Department of Veterans' Services for assistance to members of the New Mexico National Guard activated for service in the global war on terrorism and to their families.

Contact:
Department of Military Affairs
47 Bataan Blvd.
Santa Fe, NM 87508
(505) 474-1909

How will contributions to the Kids 'n Parks Education Program be used?

Contributions go to field trip costs for children. The State Parks Division of the New Mexico Energy, Minerals and Natural Resources Department administers this grant program.

Contact:
New Mexico State Parks Division
1220 So. St. Francis Drive
Santa Fe, NM 87505
(888) 667-2757 or (505) 476-3384

How will contributions to the Amyotrophic Lateral Sclerosis Research Fund be used?

The fund is appropriated to the Board of Regents of the University of New Mexico for amyotrophic lateral sclerosis (Lou Gehrig's disease) research. Money in the fund at the end of a fiscal year reverts to the general fund for government operations.

Contact:
UNM School of Medicine
Office of Development and Khatali Alumni Relations
MSC 08 4720, BMSB 187
1 University of New Mexico
Albuquerque, NM 87131-0001
(505) 272-5112

What is the definition of a Qualifying Dependent?

A qualifying dependent is a person under the age of 15 at the end of the tax year who has received the services of a caregiver. A dependent includes a child of divorced or legally separated parents when the taxpayer meets all requirements for claiming a federal Child Care Credit.

What is the definition of Gainfully Employed?

Gainfully employed means working for others for compensation, either full time, part time, or being self-employed. Actively seeking employment or school attendance does not qualify as gainful employment.

What is the definition of Caregiver?

A caregiver is either an individual 18 years of age or over, or a corporation who receives compensation from the credit claimant for providing direct care and supervision to a qualifying dependent in New Mexico. A caregiver may be related to, but not a dependent of, the claimant.

Deluxe Edition

Includes All Free Features PLUS:

Audit Assist

Protect your taxes with Audit Assist!

Over 1.7 million taxpayers were audited last year... let us help. Our tax professionals will assist you if you are audited by the IRS. Get the peace of mind that comes from knowing you are covered.

Included with DELUXE...
Find out More!

Free Edition

FREE Federal, FREE e-file:

Our online application is designed to be simple and fast. Most returns can be completed within 30 minutes. No software to download. Use any computer that has an internet connection.

© 2002-2014 FreeTaxUSA, a TaxHawk, Inc. owned and operated website - Terms of Use