SENATE BILL 896

47th legislature - STATE OF NEW MEXICO - first session, 2005

INTRODUCED BY

H. Diane Snyder

AN ACT

RELATING TO TAXATION; PROVIDING FOR AN INCOME TAX CREDIT FOR TAXPAYERS OVER THE AGE OF FORTY-FIVE FOR AMOUNTS PAID AS PREMIUMS FOR QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS DEFINED IN SECTION 7702(B)(b) OF THE INTERNAL REVENUE CODE OF 1986.

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--LONG-TERM CARE INSURANCE CONTRACT PREMIUMS.--

          A. A taxpayer who files an individual New Mexico income tax return and who is not a dependent of another individual may claim a credit in an amount determined pursuant to Subsection B of this section for amounts paid as premiums for qualified long-term care insurance contracts defined in Section 7702(B)(b) of the Internal Revenue Code if the premiums have not been included in the taxpayer's itemized deductions, as defined in Section 63 of the Internal Revenue Code and if the amounts paid as premiums have not been claimed as part of a deduction claimed pursuant to Section 7-2-35 NMSA 1978.

          B. The credit provided in Subsection A of this section may be claimed in an amount equal to the following percentages of amounts paid as premiums for qualified long-term care insurance contracts defined in Section 7702(B)(b) of the Internal Revenue Code during the taxable year based on the taxpayer's age as follows:

                (1) twenty-five percent for taxpayers of at least forty-five years of age but under fifty years of age;

                (2) thirty-seven and one-half percent for taxpayers of at least fifty years of age but under fifty-five years of age;

                (3) fifty percent for taxpayers of at least fifty-five years of age but under sixty years of age;

                (4) sixty-two and one-half percent for taxpayers of at least sixty years of age but under sixty-five years of age; and

                (5) seventy-five percent for taxpayers of at least sixty-five years of age.

          C. A husband and wife who file separate returns for the 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 the joint return."

     Section 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2005.

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