Summary:

 Senate Bill 140 (SB 140) establishes a state income tax exemption for individuals with certain income levels. The bill exempts state income taxes for single filers earning $40,000 or less, married individuals filing separately with incomes of $30,000 or less, and married individuals filing jointly with incomes of $60,000 or less. SB 140 applies to taxable years beginning on or after January 1, 2025. 

Legislation Overview:

 Senate Bill 140 (SB 140) introduces an income tax exemption aimed at providing financial relief to low- and moderate-income households. The bill establishes income thresholds based on filing status, as follows:
	•	Single Filers: Exempt from state income tax if their modified gross income is $40,000 or less.
	•	Married Filing Separately: Exempt from state income tax if their modified gross income is $30,000 or less.
	•	Married Filing Jointly: Exempt from state income tax if their modified gross income is $60,000 or less.

This measure simplifies tax compliance for eligible individuals and reduces their financial burden. The exemption applies to taxable years starting January 1, 2025, and is anticipated to have a fiscal impact by decreasing state income tax revenue, though precise estimates depend on the number of qualifying taxpayers. The bill reflects an effort to support lower-income households while maintaining consistency with existing filing categories in New Mexico’s tax code.
 

Current Law:

 Under current law, all individual incomes are subject to state income taxation based on New Mexico’s progressive tax brackets, without specific exemptions tied to income thresholds as outlined in SB 140. While existing deductions and credits reduce taxable income for some individuals, there is no blanket exemption based on filing status and income level as proposed in this legislation.