RURAL HEALTH CARE TAX CREDIT CHANGES

HB0142

HOUSE BILL 142

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Sarah Silva
and
Anita Gonzales

AN ACT

RELATING TO TAXATION; CHANGING THE NAME OF THE RURAL HEALTH
CARE PRACTITIONER TAX CREDIT; EXPANDING THE CREDIT TO INCLUDE A
HEALTH CARE PRACTITIONER PROVIDING SERVICES IN AN URBAN HEALTH
CARE UNDERSERVED AREA; INCREASING THE AMOUNT OF CREDIT THAT CAN
BE CLAIMED FOR A HEALTH CARE PRACTITIONER IN A RURAL HEALTH
CARE UNDERSERVED AREA; REDUCING THE NUMBER OF PRACTICE HOURS
REQUIRED FOR AN EMERGENCY MEDICAL PHYSICIAN TO BE ELIGIBLE FOR
THE CREDIT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1.
Section 7-2-18.22 NMSA 1978 (being Laws 2007,
Chapter 361, Section 2, as amended) is amended to read:

"7-2-18.22. [
RURAL
] HEALTH CARE PRACTITIONER TAX

CREDIT.--

A. A taxpayer who files an individual New Mexico
tax return, who is not a dependent of another individual, who
is [
an eligible
]
a
health care practitioner and who has
provided health care services in New Mexico in a rural health
care underserved area
or an urban health care underserved area

in a taxable year may claim a credit against the tax liability
imposed by the Income Tax Act. The credit provided in this
section may be referred to as the "[
rural
] health care
practitioner tax credit".

B. The [
rural
] health care practitioner tax credit
may be claimed [
and allowed
]
by a health care practitioner
described in Subparagraphs (a) through (f) of Paragraph (2) of
Subsection H of this section
in an amount [
that shall not
exceed:

(1) five thousand dollars ($5,000) for all
physicians, osteopathic physicians, dentists, psychologists,
podiatric physicians and optometrists who qualify pursuant to
the provisions of this section and have provided health care
during a taxable year for at least one thousand five hundred
eighty-four hours at a practice site located in an approved
rural health care underserved area. Eligible health care
practitioners listed in this paragraph who provided health care
services for at least seven hundred ninety-two hours but less
than one thousand five hundred eighty-four hours at a practice
site located in an approved rural health care underserved area
during a taxable year are eligible for one-half of the tax
credit amount; and

(2) three thousand dollars ($3,000) for all
pharmacists, dental hygienists, physician assistants, certified
registered nurse anesthetists, certified nurse practitioners,
clinical nurse specialists, registered nurses, midwives,
licensed clinical social workers, licensed independent social
workers, professional mental health counselors, professional
clinical mental health counselors, marriage and family
therapists, professional art therapists, alcohol and drug abuse
counselors and physical therapists who qualify pursuant to the
provisions of this section and have provided health care during
a taxable year for at least one thousand five hundred eighty-four hours at a practice site located in an approved rural
health care underserved area. Eligible health care
practitioners listed in this paragraph who provided health care
services for at least seven hundred ninety-two hours but less
than one thousand five hundred eighty-four hours at a practice
site located in an approved rural health care underserved area
during a taxable year are eligible for one-half of the tax
credit amount
]
equal to the following amounts if the health
care practitioner provides health care in the following areas
for the following number of hours during the taxable year in
which the credit is claimed:

(1) ten thousand dollars ($10,000) for:

(a) at least one thousand five hundred
eighty-four hours at a practice site located in a rural health
care underserved area; and

(b) if the health care practitioner is
an emergency medical physician, at least one thousand four
hundred forty hours at a practice site located in a rural or
urban health care underserved area;

(2) five thousand dollars ($5,000) for:

(a) at least seven hundred ninety-two
hours but less than one thousand five hundred eighty-four hours
at a practice site located in a rural health care underserved
area;

(b) at least one thousand five hundred
eighty-four hours at a practice site located in an urban health
care underserved area; and

(c) if the health care practitioner is
an emergency medical physician, at least seven hundred twenty
hours but less than one thousand four hundred forty hours in a
rural or urban health care underserved area; and

(3) two thousand five hundred dollars ($2,500)
for at least seven hundred ninety-two hours but less than one
thousand five hundred eighty-four hours at a practice site
located in an urban health care underserved area.

C. The health care practitioner tax credit may be
claimed by a health care practitioner described in
Subparagraphs (g) through (m) of Paragraph (2) of Subsection H
of this section in an amount equal to the following amounts if
the health care practitioner provides health care in the
following areas for the following number of hours during the
taxable year in which the credit is claimed:

(1) seven thousand five hundred dollars
($7,500) for at least one thousand five hundred eighty-four
hours at a practice site located in a rural health care
underserved area;

(2) three thousand dollars ($3,000) for at
least one thousand five hundred eighty-four hours at a practice
site located in an urban health care underserved area;

(3) three thousand seven hundred fifty dollars
($3,750) for at least seven hundred ninety-two hours but less
than one thousand five hundred eighty-four hours at a practice
site located in a rural health care underserved area; and

(4) one thousand five hundred dollars ($1,500)
for at least seven hundred ninety-two hours but less than one
thousand five hundred eighty-four hours in an urban health care
underserved area
.

[
C.
]
D.
Before [
an eligible
]
a
health care
practitioner may claim the [
rural
] health care practitioner tax
credit, the practitioner shall submit a completed application
to the department of health that describes the practitioner's
clinical practice and contains additional information that the
department of health may require. The department of health
shall determine whether [
an eligible
]
a
health care
practitioner qualifies for the [
rural health care practitioner
]
tax credit and shall issue a certificate to [
each qualifying
eligible
]
a
health care practitioner. The department of health
shall provide the taxation and revenue department appropriate
information for all [
eligible
] health care practitioners to
whom certificates are issued in a secure manner on regular
intervals agreed upon by both the taxation and revenue
department and the department of health.

[
D.
]
E.
A taxpayer claiming the credit provided by
this section shall submit a copy of the certificate issued by
the department of health with the taxpayer's New Mexico income
tax return for the taxable year. If the amount of the credit
claimed exceeds a taxpayer's tax liability for the taxable year
in which the credit is being claimed, the excess may be carried
forward for three consecutive taxable years.

[
E.
]
F.
A taxpayer allowed a tax credit pursuant to
this section shall claim the credit on forms and in a manner
required by the department.

[
F.
]
G.
The tax credit provided by this section
shall be included in the tax expenditure budget pursuant to
Section 7-1-84 NMSA 1978, including the annual aggregate cost
of the tax credit.

[
G.
]
H.
As used in this section:

(1) "emergency medical physician" means a
physician licensed pursuant to the provisions of the Medical
Practice Act who provides care to patients in an emergency
setting;

[
(1)
]
(2)
"[
eligible
] health care
practitioner" means:

(a) a dentist [
or dental hygienist
]
licensed pursuant to the Dental Health Care Act;

[
(b) a midwife that is a: 1) certified
nurse-midwife licensed by the board of nursing as a registered
nurse and licensed by the public health division of the
department of health to practice nurse-midwifery as a certified
nurse-midwife; or 2) licensed midwife licensed by the public
health division of the department of health to practice
licensed midwifery;

(c)
]
(b)
an optometrist licensed
pursuant to the provisions of the Optometry Act;

[
(d)
]
(c)
an osteopathic physician
licensed pursuant to the provisions of the Medical Practice
Act;

[
(e)
]
(d)
a physician licensed pursuant
to the provisions of the Medical Practice Act or a physician
assistant licensed pursuant to the provisions of the Physician
Assistant Act;

[
(f)
]
(e)
a podiatric physician licensed
pursuant to the provisions of the Podiatry Act;

[
(g)
]
(f)
a psychologist licensed
pursuant to the provisions of the Professional Psychologist
Act;

(g) a midwife that is a: 1) certified
nurse-midwife licensed by the board of nursing as a registered
nurse and licensed by the public health division of the
department of health to practice nurse-midwifery as a certified
nurse-midwife; or 2) licensed midwife licensed by the public
health division of the department of health to practice
licensed midwifery;

(h) a registered nurse licensed pursuant
to the provisions of the Nursing Practice Act;

(i) a pharmacist licensed pursuant to
the provisions of the Pharmacy Act;

(j) a licensed clinical social worker or
a licensed independent social worker licensed pursuant to the
provisions of the Social Work Practice Act;

(k) a professional mental health
counselor, a professional clinical mental health counselor, a
marriage and family therapist, an alcohol and drug abuse
counselor or a professional art therapist licensed pursuant to
the provisions of the Counseling and Therapy Practice Act;
[
and
]

(l) a physical therapist licensed
pursuant to the provisions of the Physical Therapy Act;
and

(m) a dental hygienist licensed pursuant
to the Dental Health Care Act;

[
(2)
]
(3)
"health care underserved area" means
a geographic area or practice location in which it has been
determined by the department of health, through the use of
indices and other standards set by the department of health,
that sufficient health care services are not being provided;

[
(3)
]
(4)
"practice site" means a private
practice, public health clinic, hospital, public or private
nonprofit primary care clinic or other health care service
location in a health care underserved area; [
and

(4)
]
(5)
"rural" means a rural county or an
unincorporated area of a partially rural county [
as
]
that is

designated by the health resources and services administration
of the United States department of health and human services
to
be a health care underserved area; and

(6) "urban" means a metropolitan area that is
designated by the health resources and services administration
of the United States department of health and human services to
be a health care underserved area
."

SECTION 2.
APPLICABILITY.--The provisions of this act
apply to taxable years beginning on and after January 1, 2026.

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