This bill proposes significant modifications to New Mexico's taxation framework, particularly regarding income tax deductions and credits. It allows taxpayers to claim deductions for income derived from qualified tips, overtime compensation, and social security income, aligning these provisions with federal tax standards. The bill repeals the Working Families Tax Credit and introduces the Earned Income Tax Credit, which varies based on the number of qualifying children. Additionally, it establishes a new Foster Parent and Guardian Income Tax Credit for eligible taxpayers, with specific criteria and maximum credit amounts. The bill also broadens the existing deduction for unreimbursed medical care expenses to include all income levels and extends a gross receipts tax deduction for health care practitioners to cover coinsurance payments made by patients.

In addition to tax changes, the bill amends existing health care legislation by expanding the definitions and scope of various health care entities and services. It introduces new categories such as "hospitals," "hospices," and "nursing homes" as recognized providers of health care services. The definitions of "copayment" and "coinsurance" are clarified to specify the amounts insured individuals must pay for medical services, replacing previous terminology. Furthermore, the term "health care insurer" is broadened to encompass health maintenance organizations and nonprofit health care plans. The bill also defines "managed care health plan" and "managed care organization," emphasizing their roles in delivering comprehensive health care services. The provisions are set to apply to taxable years beginning on or after January 1, 2026, with certain sections effective from July 1, 2026, aiming to modernize and clarify the legal framework governing health care services and insurance in the state.

Statutes affected:
introduced version: 7-2-18.15, 7-2-37, 7-9-93