NM HB264

Creates new state income tax deductions for qualified tips, qualified overtime compensation, and Social Security income that mirror deductions available under federal law (26 U.S.C. 224, 225, and 151)

Repeals the existing Working Families Tax Credit and replaces it with an Earned Income Tax Credit offering credit percentages of 2.6% to 15.3% based on number of qualifying children, with earned income thresholds ranging from $8,000 to $15,000 and phaseout amounts from $25,000 to $40,000

Creates a refundable Foster Parent and Guardian Income Tax Credit of $250 per month (maximum $3,000 annually) for foster parents or guardians of children, available for taxable years through December 31, 2031

Expands the income tax deduction for unreimbursed medical care expenses by removing income-based percentage limits, allowing all taxpayers to deduct 100% of qualifying medical expenses regardless of income level

Extends the gross receipts tax deduction for health care practitioners from July 1, 2028 to July 1, 2032, and expands it to include coinsurance payments (not just copayments and deductibles) paid by patients for commercial contract services