46th legislature - STATE OF NEW MEXICO - first session, 2003

RELATING TO TAXATION; PROVIDING INCOME TAX AND CORPORATE INCOME TAX CREDITS FOR EMPLOYERS WHO EMPLOY DEVELOPMENTALLY DISABLED PERSONS FOR WAGES IN EXCESS OF THE FEDERAL MINIMUM WAGE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. A new section of the Income Tax Act is enacted to read:

"[NEW MATERIAL] TAX CREDIT--EMPLOYERS OF DEVELOPMENTALLY DISABLED PERSONS.--

A. A taxpayer who files an individual New Mexico income tax return may claim a credit with respect to each developmentally disabled employee of the taxpayer who meets the eligibility requirements in Subsection B of this section in an amount equal to fifty percent of the amount of wages paid to the employee in the taxable year for which the credit is claimed.

B. For a taxpayer to be eligible for the tax credit in Subsection A of this section for an employee:

(1) the employee must have been diagnosed by a licensed physician as meeting the definition of having a developmental disability as defined in Subsection H of Section 43-1-3 NMSA 1978; and

(2) the employer must pay the employee wages that equal or exceed one hundred twenty-five percent of the federal minimum wage in effect for the taxable year for which the credit is claimed.

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

D. A taxpayer who otherwise qualifies for a credit pursuant to this section may claim his pro rata share of the credit with respect to eligible employees employed by a partnership or other business association of which the taxpayer is a member. The total tax credit claimed by all members of the partnership or association shall not exceed the amount of the tax credit provided in Subsection A of this section with respect to each employee for which the credit is allowed.

E. The tax credit provided in this section may only be deducted from the taxpayer's income tax liability. Any portion of the tax credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years."

Section 2. A new section of the Corporate Income and Franchise Tax Act is enacted to read:

"[NEW MATERIAL] TAX CREDIT--EMPLOYERS OF DEVELOPMENTALLY DISABLED PERSONS.--

A. A taxpayer that files a New Mexico corporate income tax return may claim a credit with respect to each developmentally disabled employee of the taxpayer who meets the eligibility requirements in Subsection B of this section in an amount equal to fifty percent of the amount of wages paid to the employee in the taxable year for which the credit is claimed.

B. For a taxpayer to be eligible for the tax credit in Subsection A of this section for an employee:

(1) the employee must have been diagnosed by a licensed physician as meeting the definition of having a developmental disability as defined in Subsection H of Section 43-1-3 NMSA 1978; and

(2) the employer must pay the employee wages that equal or exceed one hundred twenty-five percent of the federal minimum wage in effect for the taxable year for which the credit is claimed.

C. A taxpayer that otherwise qualifies for a credit pursuant to this section may claim the pro rata share of the credit with respect to eligible employees employed by a partnership or other business association of which the taxpayer is a member. The total tax credit claimed by all members of the partnership or association shall not exceed the amount of the tax credit provided in Subsection A of this section with respect to each employee for which the credit is allowed.

D. The tax credit provided in this section may only be deducted from the taxpayer's corporate income tax liability. Any portion of the tax credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years."

Section 3. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2003.