HOUSE BILL 583

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

Christine Trujillo

 

 

 

 

 

AN ACT

RELATING TO TAXATION; PROVIDING FOR AN INCOME TAX CREDIT FOR THE PURCHASE OF A LONG-TERM CARE INSURANCE POLICY.

 

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] LONG-TERM CARE INSURANCE TAX CREDIT.--

          A. A taxpayer who files an individual New Mexico income tax return, who is not a dependent of another individual and who after January 1, 2014 and prior to January 1, 2018 purchases a long-term care insurance policy may claim a credit in an amount equal to the premiums paid for the long-term care insurance policy. The tax credit provided in this section may be referred to as the "long-term care insurance tax credit".

          B. The purpose of the long-term care insurance tax credit is to encourage an individual to purchase long-term care insurance.

          C. A taxpayer may claim the long-term care insurance tax credit in the taxable year in which the taxpayer purchased the long-term care insurance policy. The taxpayer shall claim the credit within one year following the end of the calendar year in which the taxpayer purchased the long-term care insurance policy.

          D. The taxpayer may only apply the long-term care insurance tax credit against the taxpayer's income tax liability. That portion of the tax credit approved by the department that exceeds a taxpayer's income tax liability in the taxable year in which the credit is claimed shall not be refunded to the taxpayer. The tax credit shall not be carried forward or transferred to another taxpayer.

          E. A husband and wife filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the long-term care insurance tax credit that would have been claimed on a joint return.

          F. The taxpayer shall submit an application to the human services department that identifies the long-term care insurance policy that qualifies the taxpayer for the tax credit by policy number, terms and premiums and any other information that the human services department requires to determine the eligibility of the taxpayer for the tax credit.

          G. The human services department shall adopt rules establishing procedures to certify a taxpayer for the purposes of obtaining a long-term care insurance tax credit. The rules shall ensure that a taxpayer claims the credit in an amount based on the price of premiums paid and that the credit is given only once per individual long-term care insurance policy. The human services department shall issue a dated certificate of eligibility containing the taxpayer's information, the amount of long-term care insurance tax credit for which the taxpayer is eligible and any other information required by the taxation and revenue department. All certificates of eligibility issued pursuant to this subsection shall be sequentially numbered, and an account of all certificates issued or destroyed shall be maintained by the human services department. The taxation and revenue department shall audit the records of the long-term care insurance tax credit maintained by the human services department on a periodic basis to ensure effective administration of the credit and compliance with the Tax Administration Act and with this section.

          H. To claim a long-term care insurance tax credit, the taxpayer shall provide to the taxation and revenue department the certificate of eligibility issued by the human services department pursuant to this section to the taxpayer for the taxable year in which the tax credit is claimed.

          I. The taxation and revenue department and human services department shall compile an annual report that includes the number of taxpayers approved to receive the

tax credit, the aggregate amount of credits approved and any other information necessary to evaluate the effectiveness of the tax credit. Beginning in 2015 and every three years thereafter, the departments shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the tax credit and whether the tax credit is performing the purpose for which it was created.

          J. As used in this section, "long-term care insurance policy" means an insurance product that helps provide for the cost of long-term care beyond a predetermined period, covers care generally not covered by health insurance, medicare or medicaid and provides long-term care for individuals who are generally not sick in the traditional sense but, instead, are unable to perform the basic activities of daily living."

     SECTION 2. APPLICABILITY.--The provisions of this act shall apply to taxable years beginning on or after January 1, 2014.

     SECTION 3. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2014.

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