The New Mexico Taxation and Revenue Department has issued a Taxability of COVID Relief Payments bulletin, published as Tax Bulletin 100.37. To read the bulletin, visit tax.newmexico.gov/forms-publications/ and open file B-100.37 Taxability of COVID Relief Payments.
The $1,200 economic stimulus payments sent to many Americans over the summer and the $600 stimulus payments now being distributed by the federal government are not subject to state or federal income tax, according to the state Taxation and Revenue Department.
Forgivable loans issued to thousands of businesses through the Paycheck Protection Program are not subject to state personal income tax or gross receipts tax.
Taxation rules are more complicated for grants funded through the CARES Act, such as the Small Business CARES Relief Grants sent to more than 6,000 New Mexico businesses in December and January.
CARES Act grants generally are not subject to gross receipts taxes but are taxed for federal and state income taxes.
More than 100,000 New Mexicans received a mix of state and federal unemployment payments.
“Generally speaking, the unemployment benefit is taxable,” Taxation and Revenue Department spokesman Charlie Moore said.