As a business owner in New Mexico, you may be eligible for various tax credits that can help reduce your tax liability and support the growth of your business. In this article, we will provide an overview of some of the most common tax credits available in New Mexico.
- High-Wage Jobs Tax Credit
The High-Wage Jobs Tax Credit is designed to incentivize businesses to create high-paying jobs in New Mexico. The credit is equal to 5% of the eligible employee’s wage, up to a maximum credit of $12,500 per year per employee. To be eligible for the credit, employees must be paid at least 125% of the state average wage and work in New Mexico for at least 185 days per year.
- Research and Development Tax Credit
The Research and Development Tax Credit is designed to support innovation and encourage businesses to invest in research and development activities. The credit is equal to 5% of qualified research and development expenses, with a maximum credit of $5 million per year. To be eligible for the credit, businesses must have a permanent location in New Mexico and conduct research and development activities within the state.
- Angel Investment Tax Credit
The Angel Investment Tax Credit is designed to support the development of early-stage businesses by providing tax credits to investors who provide equity financing to these businesses. The credit is equal to 10% of the investment, with a maximum credit of $50,000 per year per investor. To be eligible for the credit, businesses must be located in New Mexico and have fewer than 25 employees.
- Film Production Tax Credit
The Film Production Tax Credit is designed to support the film industry in New Mexico. The credit is equal to 25% of qualified production expenses, with a maximum credit of $50 million per year. To be eligible for the credit, film production companies must have a permanent location in New Mexico and produce at least 60% of their films in the state.
- Manufacturing Deduction
The Manufacturing Deduction is designed to support businesses engaged in manufacturing activities in New Mexico. The deduction is equal to 3% of qualified manufacturing expenses, with a maximum deduction of $50,000 per year. To be eligible for the deduction, businesses must have a permanent location in New Mexico and engage in manufacturing activities within the state.
There are several tax credits available to businesses in New Mexico that can help reduce tax liability and support the growth of your business. If you are a business owner in New Mexico, it is important to familiarize yourself with these credits and determine which ones you may be eligible for.
Be sure to contact KC&A today to ensure that you are taking advantage of all available tax benefits!
