A refundable tax credit buried in SB151 could put cash in your pocket if you hire full-time employees—but only if you act before 2036.
Most New Mexico property and real estate owners don't realize that SB151, a corporate income tax bill passed in recent legislative session, contains a provision that could directly benefit their business if they hire new full-time employees. The credit is refundable—meaning you can receive cash back even if you owe no taxes—but it only applies to jobs created before a specific deadline.
Under Section 9 of SB151 (pages 50–51), an "eligible employer" that creates a new high-wage job may claim a refundable tax credit equal to 8.5% of wages paid to that employee. The maximum credit is $12,750 per job per qualifying period.
Because the credit is refundable, it works differently than a standard tax deduction. If your tax liability is lower than the credit amount, the state pays you the difference in cash. For a small business with modest tax liability, this can mean real money in your operating account.
The credit applies against three types of taxes: gross receipts tax, withholding tax, and compensating tax.
The credit applies to new high-wage jobs created on or after July 1, 2004 and prior to July 1, 2036. This means you have until June 30, 2036, to create a qualifying job and claim the credit.
To qualify, you must meet the definition of an "eligible employer" under the statute. The specifics of that definition—such as minimum payroll, business structure, or industry—are set elsewhere in the law and should be reviewed with a tax professional or your accountant before you hire.
Real estate and property management businesses that expand their staff—whether adding a property manager, leasing agent, maintenance coordinator, or administrative employee—may be eligible. If the new hire meets the "high-wage" threshold and you are an eligible employer, you can offset your tax burden and potentially receive a refund.
The refundable nature of the credit makes it more valuable than a standard deduction. For example, if you owe $10,000 in gross receipts tax but your credit is $12,750, you receive a $2,750 payment from the state.
Before hiring with the intention to claim this credit, confirm with your accountant or tax advisor that your business qualifies as an eligible employer and that the position meets the high-wage requirement. The definition of "high-wage" and eligibility criteria are technical and vary by situation.
Keep detailed records of wages paid and the date the job was created. You'll need this documentation when you file your return.
Remember: the deadline is July 1, 2036. Any new high-wage job created after that date will not qualify for this credit.
Source: New Mexico SB151, Section 9, pages 50–51. For a detailed, business-specific summary of this provision and how it may apply to your property or real estate operation, consult your tax professional or contact your local real estate trade association.