Credits & Rebates : Individuals

Quick Facts

Benefit type: Refundable state rebate paid through the New Mexico personal income tax system.
Who qualifies: Full-year New Mexico residents with low household incomes who file Form PIT-1 and meet income limits based on family size.
Maximum amount: Up to $450 per household, calculated using a statutory table that considers income, family size, and county of residence.
How to claim: Complete the Low-Income Comprehensive Tax Rebate (LICTR) schedule on your New Mexico income tax return.
Why it matters: LICTR offsets the regressive impact of gross receipts tax and helps families cover essentials like utilities, groceries, and transportation.

Program Overview

New Mexico’s Low-Income Comprehensive Tax Rebate has existed since 1979 as part of the state’s effort to make its tax system more equitable. Because New Mexico relies heavily on gross receipts tax (a broad-based tax on goods and services), low-income households often pay a larger share of their income in taxes. LICTR provides cash refunds to mitigate that burden.

Unlike tax credits tied to specific expenses, LICTR is based on income, household size, and location. Rural counties with higher cost burdens may qualify for larger rebates. The rebate is fully refundable, so eligible taxpayers receive the money even if they owe no state income tax. LICTR pairs well with the Working Families Tax Credit (New Mexico’s version of the Earned Income Tax Credit) and other refundable credits like the Child Income Tax Credit.

Eligibility Requirements

Residency: You must be a New Mexico resident for the entire tax year. Part-year and nonresidents cannot claim LICTR.
Income limits: The rebate uses statutory income thresholds tied to family size. For 2024, income must generally be below $36,000 for single individuals, $46,000 for two-person households, and higher for larger families. The income limit adjusts for inflation and is published in the PIT instructions.
Family size: Includes the taxpayer, spouse, and dependents claimed on the return. Larger families qualify for higher rebate amounts and higher income thresholds.
Filing requirement: File Form PIT-1 even if you owe no tax. Attach the LICTR schedule (PIT-RC).
Not incarcerated: Individuals incarcerated for 180+ days are ineligible for the months they were incarcerated.
Social Security number or ITIN: Required for each person listed. ITIN filers are eligible.

Benefit Calculation

The rebate amount is determined by a table that accounts for:

Modified gross income (MGI): New Mexico adjusted gross income plus certain additions (e.g., nontaxable interest).
Family size: More dependents increase the rebate.
Location factor: Residents of certain counties receive higher rebates due to higher average tax burdens.

The table is published annually in the PIT instructions. You locate your income range and family size to find the rebate amount. The maximum for 2024 is $450.

Example Calculations

Single taxpayer: Ana earns $22,000 and lives in Bernalillo County. The table awards $140.
Family of four: The Lopez family earns $38,000 and resides in Doña Ana County. They qualify for $360.
Senior couple: Miguel and Rosa, both 68, earn $28,000 from Social Security and pensions. Living in San Juan County, they receive $220.

Application Process

Gather documentation: Collect income statements (W-2s, 1099s), Social Security statements, and proof of residency.
Complete Form PIT-1: Enter income, deductions, and credits as usual.
Fill out Schedule PIT-RC: Provide family size, income, and county. Use the LICTR table to find your rebate amount.
Attach schedule: Ensure PIT-RC is attached when filing electronically or on paper.
Submit return: File by April 15 (or the extended deadline). E-filing ensures faster processing.
Receive refund: The rebate is included in your overall refund. Choose direct deposit for faster payment.

Documentation Checklist

W-2s and 1099s.
Social Security SSA-1099 forms.
Proof of residency (utility bills, lease agreements) if requested.
ITIN assignment letters for noncitizen filers.
County of residence confirmation (driver’s license or property tax statement) in case of audit.

Interaction with Other Credits

Working Families Tax Credit: Claim alongside LICTR for additional cash. Many families qualify for both.
Child Income Tax Credit: New Mexico’s per-child refundable credit stacks with LICTR.
Property Tax Rebate for Seniors: Seniors can claim both programs if eligible.
Federal credits: LICTR does not affect federal EITC or Child Tax Credit calculations.

Strategies to Maximize the Rebate

File even with low income: Many households mistakenly skip filing if they owe nothing. Filing ensures you receive LICTR and other refundable credits.
Claim all dependents: Make sure everyone you support more than half the year is listed if they meet dependency rules; this increases family size for LICTR.
Maintain residency documentation: Keep proof of New Mexico residency to respond quickly if the Taxation and Revenue Department requests verification.
Use free tax preparation: The state sponsors Tax Help New Mexico and VITA sites familiar with LICTR.
Check eligibility annually: Income limits adjust each year. Even if you exceeded the threshold last year, lower income this year could restore eligibility.

Common Mistakes

Using incorrect county code: Double-check the county of residence code when completing PIT-RC. Errors can change your rebate amount.
Omitting nontaxable income: LICTR uses modified gross income, which includes some nontaxable sources. Review instructions to avoid misreporting.
Missing Social Security numbers/ITINs: Returns without valid identifiers are delayed or denied.
Late filing: Filing after the deadline may forfeit the rebate unless you have an approved extension.

Example Scenarios

Seasonal worker: Jorge works construction part-time and earns $18,000. With two dependents, he receives $310, helping bridge winter months with less work.
Student family: Aida and Luis attend community college while raising a toddler. Their income of $24,000 qualifies them for $280 plus the Working Families Tax Credit, supporting childcare expenses.
Retired grandparents raising grandchildren: Carmen and Julio care for two grandchildren and rely on Social Security. Their $34,000 income qualifies for $330, which they apply to school supplies.

Frequently Asked Questions

Can I claim LICTR if I moved mid-year? No. You must live in New Mexico the entire year.
Do I need earned income? No. Retirement, disability, or unemployment benefits count toward income, but you can still qualify.
Is the rebate taxable? LICTR is not taxable for federal or state purposes.
What if I discover eligibility after filing? File an amended return within three years to add LICTR.
Does LICTR affect public assistance? Generally no, but report refunds if your caseworker requests asset information.