Commentary: SB 166 allows a New Mexico taxpayer to take a tax credit the following tax year for taxes on personal income that were overstated and overpaid. The bill passed the Senate 37-0 and now goes to the House.
“People have lost out on overpayment of their state taxes, now we will fix that,” bill sponsor Senator Sue Wilson Beffort said.
The overpayment of taxes could have resulted from overstated amounts of such things as personal income, social security, Medicaid, Workers Compensation.
Currently, only the Federal Government gives a credit on next year taxes for overpayment of taxes on personal income, state government does not have the mechanism to do that.
The bill creates a new section of the Income Tax Act that allows a taxpayer who made a “claw back” repayment and has taken a federal credit to take a credit on their New Mexico income tax.