ICYMI: Senate Inaction Resulting In Tax Increase For 300,000 New Mexicans

Posted On May 18, 2015

In Case You Missed It
Senate Inaction Resulting In Tax Increase For 300,000 New Mexicans

Opinion: Widely used NM tax deduction is coming to an end
The Albuquerque Journal
By: Demesia Padilla / Secretary, New Mexico Taxation And Revenue Department
May 17, 2015

http://www.abqjournal.com/585957/opinion/widely-used-nm-tax-deduction-is-coming-to-an-end.html

 

Tax season in New Mexico has finally come to a close. While many are happily receiving tax refunds or are relieved to have filed on time, nearly one-third of New Mexico taxpayers will be disappointed to learn that one of the most commonly used state tax deductions is coming to an end due to inaction by the New Mexico Senate.

For 14 years, roughly 300,000 New Mexico taxpayers each year have utilized a tax deduction that allows them to claim a portion of their unreimbursed medical expenses against their net income.

Working families and the elderly who have relied on this deduction to provide them financial relief often face expensive and chronic medical conditions. New Mexicans who utilize this deduction tend to be in lower-income brackets; in fact, 47 percent of all claims for this deduction are for people or families earning less than $25,000 annually.

Simply put, the deduction for unreimbursed medical expenses provides badly needed relief for some of our most vulnerable residents as they work to pay their bills, provide for their families and keep their homes.

Rep. Terry McMillan, R-Las Cruces, introduced a bill this past legislative session to continue to keep this tax relief on the books in New Mexico. After all, it’s been used for 14 years and has widespread positive benefits to taxpayers.

The legislation passed the House of Representatives unanimously – with all Republicans and Democrats supporting it.

Remarkably, however, the bill was never even brought to a vote in the Senate.

Given this inaction, the unreimbursed medical deduction is currently not slated to appear on New Mexicans’ tax returns next year. That’s a shame, and this is a problem that needs to be fixed.

Again, it’s about providing relief to some of our most vulnerable citizens.

For example, a single mother with breast cancer may take advantage of the deduction for medical expenses not covered by her insurance. Specialized treatments for diseases like cancer and others quickly add up on a family’s finances. An aging grandmother facing expensive cancer treatments and extended hospital visits could combine the deduction with the exemption and refundable credit already available to relieve the financial burden.

Our elderly citizens often combat their health issues alongside depleting savings accounts and fixed incomes. An exemption and refundable credit is available for taxpayers 65 and older, but this deduction would also be available to these taxpayers to provide additional relief.

This issue isn’t isolated to those already sick or in the midst of serious medical issues. It also applies to anyone encountering a medical emergency or unexpected illness.

These can often rack up huge medical bills for specialized treatment, sometimes outside of an insurance network.

These life events can happen to anyone, and our state should be able to provide this relief when unthinkable tragedies occur.

I am certainly disappointed that the Senate failed to stand up for New Mexico’s working families and the elderly by refusing to even vote on this issue.

But it is my sincere hope that our lawmakers will do the right thing and come together to allow this relief to continue helping New Mexicans.

 

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