The proposed bill establishes a new section in the Income Tax Act to create a "Citizen Income Tax Rebate" for eligible residents of New Mexico. This rebate is available for taxable years prior to 2033 and is designed for U.S. citizens who file individual income tax returns and are not dependents of another individual. The rebate amount is set at $500, with an additional $500 for each dependent claimed and another $500 for a spouse if filing jointly. However, the rebate is not available for returns filed after May 31 of the year following the taxable year, nor for taxpayers who were inmates for more than six months or who were not physically present in New Mexico for at least six months during the taxable year.

Additionally, the bill stipulates that the rebate can be deducted from the taxpayer's New Mexico income tax liability, with any excess refunded to the taxpayer. The New Mexico tax department may require specific forms and procedures for claiming the rebate, and the total cost of the rebate will be included in the tax expenditure budget. The provisions of this act will apply to taxable years beginning on or after January 1, 2025.