NM Technology Jobs and Research & Development Tax Credit

NM Technology Jobs and Research & Development Tax Credit

Offers New Mexico technology employers tax credits for research spending and job creation.

Eligibility · United States · US-NM

The New Mexico Technology Jobs and Research & Development Tax Credit (NMSA 1978 §§7-9F-1 through 7-9F-13) provides New Mexico businesses with a state tax offset of 5% of qualified research expenditures for facilities located in urban areas, or 10% for facilities in rural areas. The credit can be applied against gross-receipts tax, compensating tax, or withholding tax. A second-layer credit — also 5% urban or 10% rural — can additionally offset corporate income tax or personal income tax when the claiming taxpayer increases annual payroll by at least $75,000 for every $1 million in qualified expenditures claimed.

A special refundability provision applies to qualified R&D small businesses, defined as companies with 50 or fewer employees, no more than $5 million in total qualified expenditures, and no more than 50% ownership by another business. For these companies, the additional income-tax layer of the credit is refundable: 100% of the excess is refunded when qualified expenditures are below $3 million, tapering to two-thirds refundable for expenditures between $3 million and $4 million, and one-third refundable for the $4 million to $5 million band. Approved credits carry forward for up to three years. National laboratories, federal facilities, and state-owned research facilities are not eligible as direct claimants. The credit has no application window; it is claimed on the annual state tax return. A 2026 legislative proposal to expand the credit through IRB stacking, a 10-year carryforward, and transferability provisions was defeated in committee on January 29, 2026, leaving current rules unchanged.