State & Local Tax Impacts of COVID-19 for New Mexico – 2021

Thoughtware Alert Published: May 03, 2021 | Updated: May 05, 2021

Information current as of March 22, 2021.

COVID-19 has changed life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to New Mexico

  • New Mexico issued guidance on the COVID-19 pandemic’s effect through direct payments, loans, and grants to individuals and to state and local governments that then made payments, loans, and grants to individuals and businesses. The New Mexico Taxation & Revenue Department’s position is that PPP is a loan and therefore doesn’t meet the statutory definition of gross receipts even if the loans were forgiven and, as such, aren’t subject to gross receipts tax. In New Mexico, income tax is based on reported federal income and therefore conforms to the federal rules in determining whether these loans are taxable. PPP has been determined to be a loan that isn’t federal taxable income, even if forgiven, and therefore also isn’t taxable income for New Mexico state income taxes. Since the IRS has provided guidance that direct payments made to individuals provided through the CARES Act (economic impact payments) are an advance of a credit for 2020 and therefore aren’t included in federal gross income, these amounts are likewise not included in New Mexico taxable income.
    • New Mexico Taxation & Revenue Department, Bulletin B-100.37; February 1, 2021.
  • New Mexico legislation exempts bars and restaurants from gross receipts tax on the sale of prepared food or nonpackaged beverages sold on-premises or delivered to customers from March 1, 2021, through July 1, 2021. The legislation also includes a $600 personal income tax rebate for people who make up to $31,200 and joint filers earning up to $39,000 for tax years 2020 through 2022.
    • New Mexico S.B. 1, enacted February 24, 2021.
  • New Mexico issued guidance on $600 individual income tax rebates. Taxpayers who qualify for the New Mexico Working Families Tax Credit also will be eligible for the extra tax rebate. The rebates are available to taxpayers who aren’t dependents, who receive the credit, and who have an adjusted gross income of $31,200 or less for single filers or $39,000 for married filing jointly or heads of household filers. Taxpayers who already filed their 2020 income tax returns and are eligible for the rebate don’t need to take further action. Taxpayers who already filed their 2020 returns and didn’t claim the credit but believe they may qualify need to file an amended return. Taxpayers may qualify for the credit, rebate, and a refund even if they don’t have a tax liability.
    • New Mexico Taxation & Revenue Department, Guidance on $600 Income Tax Rebates; March 5, 2021.
  • New Mexico announced it will extend the deadline for filing and paying 2020 state personal income taxes from April 15, 2021, to May 17, 2021, to match the federal extension.
    • New Mexico Taxation and Revenue Department, News Release; March 18, 2021.

For more information, reach out to your BKD Trusted Advisor or use the Contact Us form below.

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