Questions & Answers

What is modified gross income?

Modified gross income (MGI) is unique to New Mexico law. In general, MGI is all income and other compensation you receive from all sources (regardless of whether that income is taxable by the U.S. Government or the State of New Mexico) for you, your spouse, and your dependents.

You may not reduce MGI by deductions or offset MGI by losses allowed for income tax purposes under the New Mexico Income Tax Act or under the Internal Revenue Code.

When calculating MGI, include the MGI of the taxpayer and all household members. Even if you are Married Filing Separately, the total MGI of both spouses must appear in the calculation.

The following items are excluded from the definition of MGI and do not have to be reported:

  • Money lent to you that you are legally bound to repay
  • Supplemental Nutrition Assistance Program (SNAP) benefits or Women, Infants, and Children (WIC) vouchers
  • Payments by any party or by Medicare or any similar plan for hospital, dental, medical, or drug expenses whether or not the payment is made directly to the insured/recipient or to a third-party provider, and whether or not a premium is paid
  • Money received during the year as Low Income or Property Tax Rebates or as Child Day Care Credit
  • Medical care payments made by Medicaid, the State Human Services Department, the County Indigent Hospital Claims Fund, Champus, Veterans Administration (VA), or Workers' Compensation
  • Rent subsidies, weatherization, energy (LIHEAP), and housing rehabilitation benefits, such as Section 8 housing assistance
  • Stipends paid to foster grandparents
  • Free room and board when not considered compensation
For more information, see page three of the PIT-RC instructions .

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