NM HB224

Expands the New Mexico income tax deduction for unreimbursed medical care expenses to taxpayers of all income levels, removing the previous income-based percentage limits that capped deductions at 10-25% depending on adjusted gross income and filing status

Allows taxpayers to deduct the full amount of qualifying medical expenses paid for themselves, their spouse, or dependents, provided expenses are not reimbursed by insurance and not already claimed as federal itemized deductions

Qualifying medical care expenses include physician and hospital services, prescribed drugs, long-term care services, health insurance premiums (including Medicare Part B), licensed nursing services, and specialized therapeutic treatments

Requires taxpayers claiming the deduction to report the amount to the Taxation and Revenue Department, and mandates inclusion of the deduction's annual aggregate cost in the state tax expenditure budget

Applies to taxable years beginning on or after January 1, 2026