The bill establishes a new tax credit for physicians in New Mexico, referred to as the "physician tax credit." Eligible taxpayers must file an individual New Mexico tax return, not be a dependent, and provide at least 1,584 hours of healthcare services in the state during the taxable year. The credit amounts to $4,000 and can be claimed against the taxpayer's liability under the Income Tax Act. To qualify, physicians must apply for certification from the Department of Health, which will issue certificates of eligibility that must be submitted to the tax department. Any portion of the credit that exceeds the taxpayer's liability can be carried forward for up to three consecutive years.

Additionally, the bill allows taxpayers who already claim a rural health care practitioner tax credit to also claim the new physician tax credit. The credit will be included in the tax expenditure budget, ensuring transparency regarding its annual aggregate cost. The provisions of this act will take effect for taxable years beginning on or after January 1, 2026.