SENATE BILL 114

48th legislature - STATE OF NEW MEXICO - second session, 2008

INTRODUCED BY

H. Diane Snyder

AN ACT

RELATING TO TAXATION; PROVIDING FOR AN INCOME TAX CREDIT FOR AMOUNTS PAID AS PREMIUMS FOR QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS FOR TAXPAYERS OVER THE AGE OF FORTY-FIVE.

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 for the benefit of the taxpayer if the amounts paid as premiums have not been included in a claim for a deduction or credit pursuant to the Internal Revenue Code or pursuant to another provision of the Income Tax Act.

          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 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. For the purposes of this section, "qualified long-term care insurance contract" means a qualified long-term care insurance contract as defined in Section 7702(B)(b) of the Internal Revenue Code.

          D. 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, 2008.

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