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Category: New Mexico

New Mexico Additions to Income

If you qualify, you are required to make certain additions to your federal adjusted gross income.

  • Interest and Dividends from Federal Tax-Exempt Bonds: Enter the interest or dividend income from all state and municipal bonds that was excluded from federal adjusted gross income. This means all federally tax-exempt interest and dividends reported on IRS Forms 1040 or 1040A from state and municipal obligations. If you subtracted expenses for tax-exempt investment income on your federal return, add them back on this line to determine New Mexico taxable income. A deduction for interest and dividends of obligations exempt from New Mexico taxable income is allowed on Schedule PIT-ADJ.
  • Net Operating Loss: Enter the amount of any federal net operating loss carry-forward or carryback from “Other income” (line 21) of the IRS Form 1040. Enter as a positive amount. The federal net operating loss carry-forward is added to the income you reported on line 7 of the Form PIT-1 because the rules for applying a net operating loss deduction to New Mexico taxable income are different from the federal rules. See the instructions for PIT-ADJ, for more information on the deduction for a New Mexico net operating loss carry-forward.
  • Contributions Refunded from the NM Education Trust Fund: Enter the amount of contributions refunded to you during the tax year from the New Mexico Education Trust Fund (from one of the New Mexico-approved Section 529 college savings plans) if you closed a New Mexico-approved Section 529 college savings plan account, and enter contributions rolled-over from a New Mexico-approved Section 529 college savings plan account to a non-New Mexico-approved Section 529 college savings plan account. Do this only if you deducted the Contributions to a New Mexico-approved Section 529 Plan on Schedule PIT-ADJ of an earlier New Mexico personal income tax return. Do not include earnings refunded

For additional information pertaining to Schedule PIT-ADJ, please click here.