Scheduled: Not Scheduled
Senate Bill 223390 (SB 223390) creates the retirement savings facilitation income tax credit, clarifies definitions of the New Mexico Work and Save Act, requires certain employers to automatically enroll their employees, allows employees to opt out, and allows the New Mexico Work and Save Act to form auto-IRA partnerships with other states.Legislation Overview:
SB 223390 adds a new section to the Income Tax Act, providing for: • A “retirement savings facilitation income tax credit”. This tax credit is in the amount of up to $300 and is for business owners. • To claim this credit the owner must be registered with the New Mexico Work and Save Act and employ at least one New Mexico resident • If the tax credit exceeds tax liability it can be claimed in the subsequent 3 years. • Owners of business entities and LLCs can claim the credit. The total credit claimed cannot exceed $300. • Provides direction for the adoption and implementation of the tax credit SB 223390 amends Section 58-33-2 NMSA 1978 (Laws 2020, Chapter 7, Section 2) in the following ways: • Changes the definition of “covered employee” to someone who earns taxable income for at least 180 days. • Changes the definition of “covered employer” to an entity that has at least 5 employees, has operated for the last 24 months, and has not offered all employees an Internal Revenue Code qualified retirement plan. • Adds “eligible employer”, which is defined as an entity in New Mexico that employs four or fewer employees and does not offer all employees an Internal Revenue Code qualified retirement plan. • Changes the total fees and expenses allowable for the New Mexico work and Save IRA program from not exceeding 1% of a program’s assets, to not exceeding 1% in the initial five years of operations and .75% after the fifth year of operation. The effective date of this act is July 1, 2023.