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 this credit for up to five consecutive taxable years, provided they have an outstanding student loan balance related to their medical education. The credit amount is set at $50,000 for the taxable year in which the requirements are met. To qualify, taxpayers must apply for certification from the higher education department, which will issue a certificate detailing the eligible credit amount and applicable taxable years.

Additionally, any portion of the tax credit that exceeds a taxpayer's income tax liability will be refunded. The bill outlines the process for claiming the credit, which must occur within three taxable years following the certification. It also mandates that the credit 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.