New Mexico amends high-wage jobs credit
Thursday, April 18, 2019

New Mexico amends high-wage jobs credit

By Payroll and Entitlements Editorial Staff

Enacted legislation amends the high-wage jobs credit that may be taken for each new high-wage job in New Mexico created by an eligible employer. The credit is available against the:

  • gross receipts tax (less any local option gross receipts tax);
  • compensating tax;
  • withholding tax;
  • emergency 911 service surcharge; and
  • telecommunications relay service surcharge.

Business eligibility  requirements. The enacted law removes all business eligibility requirements, other than eligibility for development training program assistance. Further, all references to “economic-based” jobs are removed.

Credit amount.  The law changes the value of the credit from 10% to 8.5% of the wages distributed to an eligible employee in a new, high-wage job, not to exceed $12,750 per job per qualifying period (previously, $12,000).

Definitions.  The law amends the definition of “new high-wage job” to mean a job created by an eligible employer on or after July 1, 2004, and prior to July 1, 2026 (previously, July 1, 2020) that is occupied for at least 44 weeks of a qualifying period by an eligible employee (previously, 48 weeks). A definition for ”new job” is also created a to mean a job that is occupied by an employee who has not been employed in New Mexico by the eligible employer in the three years prior to the date of hire.

Qualifying periods.  Additionally, the amended law provides that a high-wage job may qualify for the credit in future periods (if it meets the requirements in those periods) even if it does not qualify for the credit in a period following the initial period. Previously, once a job were to fall out of qualification, it could not qualify for any potential remaining periods.

Restrictions.  Further, the restriction on claims by companies that previously ceased business operations is reduced from five years to two years from the closing date of the period that a credit was received.

Application processing time frame.  Finally, the law removes the qualifiers related to the time the Taxation and Revenue Department has to process applications, requiring a determination in 180 days. (Ch. 233 (H.B. 165, Laws 2019, approved April 4, 2019, and effective 90 days after adjournment of the 2019 Legislature, and applicable to qualifying periods beginning on or after January 1, 2019.)

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