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

RELATING TO TAXATION; PROVIDING AN INCOME TAX CREDIT FOR EMPLOYERS FOR A PORTION OF EMPLOYEE HEALTH INSURANCE PREMIUM EXPENSES PAID BY THE EMPLOYER.

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] CREDIT--EMPLOYEE HEALTH INSURANCE PREMIUMS PAID BY EMPLOYER.--

A. A taxpayer who is an employer and who files an individual New Mexico income tax return may claim a credit in an amount equal to twenty-five percent of the value of employee health insurance premiums paid by the taxpayer in any taxable year.

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

C. A taxpayer who otherwise qualifies and claims a credit pursuant to Subsection A of this section and who is a member of a partnership or business association that is the employer paying the employee health insurance premiums may claim a credit only in proportion to the taxpayer's interest in the partnership or association. The total credit claimed by all members of the partnership or association shall not exceed twenty-five percent of the value of the health insurance premiums paid by the partnership or association in the taxable year.

D. The credit provided in this section may only be deducted from the taxpayer's income tax liability for the taxable year for which the credit is claimed."

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

"[NEW MATERIAL] CREDIT--EMPLOYEE HEALTH INSURANCE PREMIUMS PAID BY EMPLOYER.--

A. A taxpayer that is an employer and that files a corporate income tax return may claim a credit in an amount equal to twenty-five percent of the value of employee health insurance premiums paid by the taxpayer in the taxable year.

B. A taxpayer that otherwise qualifies and claims a credit pursuant to Subsection A of this section and that is a member of a partnership or business association that is the employer paying the employee health insurance premiums may claim a credit only in proportion to the taxpayer's interest in the partnership or association. The total credit claimed by all members of the partnership or association shall not exceed twenty-five percent of the value of employee health insurance premiums paid by the resident partnership or business association in the taxable year.

C. The credit provided in this section may only be deducted from the taxpayer's corporate income tax liability for the taxable year for which the credit is claimed."

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