The proposed bill establishes a new tax credit known as the "physician income tax credit" for physicians who have completed a medical residency and practice full-time in New Mexico. Eligible taxpayers can claim a credit of up to $50,000 against their income tax liability for a maximum of five consecutive taxable years, provided they have an outstanding student loan balance related to their medical education. To qualify, physicians must apply for certification from the higher education department, which will issue a certificate detailing the amount of credit and the taxable years it can be claimed. Any portion of the credit that exceeds the taxpayer's income tax liability will be refunded.

Additionally, the bill outlines the definitions of "physician" and "practices medicine full-time," specifying that the latter requires at least 1,584 hours of healthcare provision within the taxable year. The credit will be included in the tax expenditure budget, ensuring transparency regarding its fiscal impact. The provisions of this act will take effect for taxable years beginning on or after January 1, 2025.