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Financial Planning > Tax Planning

New Mexico lawmaker seeks LTCI tax credit

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The New Mexico House is considering a bill, House Bill 72, that would create a dollar-for-dollar tax credit for long-term care insurance (LTCI) premiums.

The credit would reduce state income taxes. If a taxpayer claimed an LTCI tax credit that exceeded the taxpayer’s state income tax liability, the credit would be equal to the liability.

Rep. Christine Trujillo, D-Bernalillo, N.M., says in the text of the bill that purpose is to “encourage an individual to purchase long-term care insurance.”

The bill calls for state officials to compile annual reports measuring the effectiveness of the tax credit.

See also: 4 LTC ideas from a little to the right

In a legislature fiscal impact analysis, an analyst says New Mexico has about 53,500 residents with private LTCI, and that those residents were paying an average of $2,241 per year for their LTCI coverage in 2010.

The bill might reduce state general fund revenue by $172,000 in 2017, the analyst estimates.

If the state offered the tax credit, it would at least one full-time equivalent worker to manage the tax credit program, the analyst says.

See also: Maryland considers LTCI tax credit bill


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