Summary:

 House Bill 226 (HB 226) increases the Rural Health Care Practitioner Tax Credit for eligible health care providers working in underserved rural areas. The maximum credit increases from $5,000 to $15,000 for physicians, osteopathic physicians, dentists, psychologists, podiatric physicians, and optometrists. The credit for other eligible practitioners increases from $3,000 to $9,000. HB 226 applies to taxable years beginning on or after January 1, 2025. 

Legislation Overview:

 House Bill 226 (HB 226) proposes to amend Section 7-2-18.22 NMSA 1978 to raise the tax credit amount for eligible rural health care practitioners. Physicians, osteopathic physicians, dentists, psychologists, podiatric physicians, and optometrists providing at least one thousand five hundred eighty-four hours of care in a rural health care underserved area will qualify for the increased tax credit of $15,000. Those providing at least 792 hours, but fewer than 1,584 hours will receive half the credit amount.

Other eligible health care practitioners, including pharmacists, dental hygienists, physician assistants, nurse practitioners, midwives, social workers, and mental health counselors, will qualify for a $9,000 credit under similar conditions.
Eligible practitioners must apply for certification from the Department of Health (NMDOH), which will issue certificates confirming qualification. The credit is nonrefundable but may be carried forward for three consecutive taxable years.

Implications
HB 226 is expected to enhance recruitment and retention of health care professionals in rural areas by increasing financial incentives. The expanded credit will reduce state tax revenues but may improve health care access in underserved communities. The NMDOH and the Taxation and Revenue Department will incur administrative costs for processing eligibility certifications and tax credit claims. 

Current Law:

 The current Rural Health Care Practitioner Tax Credit provides $5,000 for physicians and certain specialists and $3,000 for other eligible health care practitioners. HB 226 triples the credit amounts to strengthen incentives for rural health care providers.