Tax Exempt Adjustment Form

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					                               INSTRUCTIONS FOR 2010 PIT-ADJ, SCHEDULE
                               OF ADDITIONS AND DEDUCTIONS/EXEMPTIONS
                                                                                      ______________________________
GENERAL INFORMATION                            local bonds;
                                           •   you have a New Mexico net operat-      STEPS FOR PREPARING THE
If you qualify, you are required to            ing loss carryover;                    SCHEDULE PIT-ADJ
make certain additions to your federal     •   you have interest income from U.S.
adjusted gross income, and you can             government securities;                 Read the section “Filling in Your Tax
take certain deductions and exemp-         •   you have railroad retirement income    Return” on page 16 of the Form PIT-1
tions from your federal adjusted gross         not taxable by New Mexico;             Instructions.
income to arrive at New Mexico tax-        •   you have Railroad Unemployment         ______________________________
able income. Use the 2010 Schedule             Insurance Act sick pay:
PIT-ADJ if any of the additions to, or     •   you or your spouse, or both, are
deductions or exemptions from, federal         members of an Indian nation, tribe     STEP 1
adjusted gross income apply to you.            or pueblo and your income was          Make sure you have all the neces-
If the items on the 2010 Schedule              wholly earned on the lands of the      sary records, approvals and certi-
PIT-ADJ do not apply to you, do not            reservation or pueblo of which the     fications.
complete this schedule or attach it to         individual is an enrolled member       ______________________________
Form PIT-1.                                    while domiciled on that reservation,
                                               tribe or pueblo;                       STEP 2
NOTE: Do not add amounts to Sched-         •   you or your spouse -- or both -- are   Fill in the 2010 Schedule PIT-ADJ.
ule PIT-ADJ that are not listed. If an         age 100 or over and you are not
item is not listed on the schedule it          dependents of another taxpayer;        Complete the 2010 Schedule PIT-ADJ
is not a valid New Mexico exemption        •   you or your spouse -- or both -- are   using the line instructions that follow.
or deduction, or it is not being prop-         age 65 or over or blind and your       ______________________________
erly reported. Also, do not include a          adjusted gross income is not over
statement in lieu of completing this           $51,000 for a joint return, $28,500    STEP 3
schedule.                                      for a single taxpayer, or $25,500      Check the figures on your 2010
                                               for married taxpayers filing sepa-     Schedule PIT-ADJ.
Additions to Federal Adjusted                  rately;
Gross Income                               •   you have federally taxable contri-     Be sure your arithmetic is correct.
                                               butions to or distributions from a     Check that all entries are complete
You must file Schedule PIT-ADJ if you          New Mexico Medical Care Savings        and correct, and that the checkboxes
have:                                          Account;                               on lines 11 and 12, if applicable, have
• interest and dividends from federal      •   you contribute to a New Mexico-        been correctly marked.
   tax-exempt bonds;                           approved Section 529 college sav-      ______________________________
• a net operating loss;                        ings plan;
• contributions refunded when clos-        •   you have net capital gains for which   STEP 4
   ing a New Mexico-approved Sec-              you can claim a deduction of up to     Transfer the totals on lines 5 and 20
   tion 529 college savings plan ac-           $1,000, or 50% of your net capital     to your Form PIT-1.
   count,                                      gains, whichever is greater;
•	 certain contributions rolled out of a   •   you have military wages or salary      Be careful to correctly transfer the to-
   New Mexico-approved Section 529             from active duty service;              tals from the 2010 Schedule PIT-ADJ
   college savings plan account, or        •   you or your spouse -- or both --       to your Form PIT-1. Make sure the
•	 a charitable deduction claimed on           are age 65 or over and you have        name and social security number on
   Federal form 1040, Schedule A, for          unreimbursed or uncompensated          the 2010 Schedule PIT-ADJ are correct
   a donation of land to private non-          medical care expenses of $28,000       and readable.
   profit or public conservation agen-         or more for yourself, your spouse
   cies for conservation purposes              or dependents;                         Continue with the line instructions and
   from which you were allowed the         •   you, your spouse or dependents         remaining steps for completing your
   New Mexico Land Conservation                have expenses related to donat-        2010 Form PIT-1.
   Tax Credit.                                 ing human organs for transfer to       ______________________________
                                               another person, or
Deductions/Exemptions from                 •   you received a reimbursement from      LINE INSTRUCTIONS
Federal Adjusted Gross Income                  the New Mexico National Guard
                                               Service Member’s Life Insurance        Enter the primary taxpayer’s name and
File Schedule PIT-ADJ if:                      Reimbursement Fund.                    social security number from line 1 of
• you have interest or dividend in-                                                   the Form PIT-1.
    come on New Mexico state and
PIT-ADJ                                                 -1A-                                            www.tax.newmexico.gov
ADDITIONS TO FEDERAL ADJUSTED             savings plan account to a non-New           agencies, institutions, instrumentalities
GROSS INCOME                              Mexico-approved Section 529 college         or political subdivisions. Also enter in-
Lines 1 through 5.                        savings plan account. Do this only if       terest or dividend income from obliga-
                                          you deducted the Contributions to a         tions of the Commonwealth of Puerto
LINE 1.                                   New Mexico-approved Section 529             Rico, Guam, Virgin Islands, American
Interest and Dividend Income from         Plan on Schedule PIT-ADJ of an earlier      Samoa or Northern Mariana Islands.
Federal Tax-exempt Bonds                  New Mexico personal income tax re-
                                          turn. Do not include earnings refunded      Income from investments in mutual
Enter the interest or dividend income     to the investor, earnings rolled-over       funds, unit investment trusts or simple
from all state and municipal bonds that   from a New Mexico-approved Section          trusts that are invested in obligations
was excluded from federal adjusted        529 college savings plan account to         of the State of New Mexico or its
gross income. This means all federally    a non-New Mexico-approved Section           agencies, institutions, instrumentali-
tax-exempt interest and dividends re-     529 college savings plan, or qualified      ties or political subdivisions, or from
ported on federal Forms 1040 or 1040A     distributions from the account. See the     the Commonwealth of Puerto Rico,
from state and municipal obligations.     bulletin on New Mexico Income Tax           Guam, Virgin Islands, American Sa-
If you subtracted expenses for tax-       and Your Education Trust (529) Plan,        moa or Northern Mariana Islands may
exempt investment income on your          from the Department’s web page.             also be deducted from New Mexico
federal return, add them back on this                                                 taxable income. You may deduct only
line to determine New Mexico taxable      LINE 4.                                     the amount shown on the annual state-
income. A deduction for interest and      Charitable Deduction Amount                 ment provided by the mutual fund, unit
dividends of obligations exempt from      Claimed on Federal Form 1040,               investment trust, or simple trust as
New Mexico taxable income is allowed      Schedule A, for a Donation of Land          flowing through to the investor from
on line 6, Schedule PIT-ADJ.              to Private Non-profit or Public Con-        such investment income. NOTE: IRAs
                                          servation Agencies for Conserva-            invested in obligations of the State of
LINE 2.                                   tion Purposes From Which You                New Mexico or its agencies, institu-
Net Operating Loss                        Were Allowed the New Mexico Land            tions, instrumentalities or political sub-
                                          Conservation Tax Credit                     divisions, or from the Commonwealth
Enter the amount of any federal net                                                   of Puerto Rico, Guam, Virgin Islands,
operating loss carry-forward or carry-    If you donated land to private-nonprofit    American Samoa or Northern Mariana
back from “Other income” (line 21) of     or public conservation agencies for         Islands do not qualify as a simple trust
federal Form 1040. Enter as a positive    conservation purposes from which you        and may not be deducted.
amount. The federal net operating loss    claimed land conservation incen-
carry-forward is added to the income      tives tax credit on Schedule PIT-CR         NOTE: On this line you may also de-
you reported on line 7 of the Form PIT-   and you claimed a charitable deduc-         duct interest on federally taxable bonds
1 because the rules for applying a net    tion for the contribution in your federal   issued by the State of New Mexico.
operating loss deduction to New Mex-      itemized deductions on your federal
ico taxable income are different from     personal income tax return, you must        If the amount on line 6 is more than the
the federal rules. See the instructions   add back the charitable deduction           amount on line 1, attach an explanation
for PIT-ADJ, line 7, for more informa-    amount included in your itemized de-        to your return.
tion on the deduction for a New Mexico    ductions claimed on your federal Form
net operating loss carry-forward.         1040, Schedule A. Enter the charitable      LINE 7.
                                          deduction amount from which you             New Mexico Net Operating Loss
LINE 3.                                   were allowed the New Mexico land
Contributions Refunded When Clos-         conservation tax credit from federal        Enter the carry-forward amount to be
ing a New Mexico-approved Section         Form 1040, Schedule A.                      applied against New Mexico taxable
529 College Savings Plan Account;                                                     income for 2010, but only if:
Certain Contributions Rolled Out of       DEDUCTIONS/EXEMPTIONS FROM                  •	 Your current federal tax return
a New Mexico-approved Section 529         FEDERAL ADJUSTED GROSS                         shows a net operating loss carry-
College Savings Plan Account              INCOME                                         forward amount, or
                                          Lines 6 through 20                          •	 You have an unused New Mexico
Enter the amount of contributions                                                        net operating loss carry-forward
refunded to you during the tax year       LINE 6.                                        amount from a previous year.
from the New Mexico Education             New Mexico Tax-Exempt Interest
Trust Fund (from one of the New           and Dividends                               All New Mexico net operating losses
Mexico-approved Section 529 college                                                   must flow from a federal net operating
savings plans) if you closed a New        Enter the total interest or dividend        loss. You cannot have a New Mexico
Mexico-approved Section 529 col-          income you received from the follow-        net operating loss without first having
lege savings plan account, and enter      ing state and local bonds exempt from       a federal net operating loss.
contributions rolled-over from a New      New Mexico taxable income: obliga-
Mexico-approved Section 529 college       tions of the State of New Mexico or its
PIT-ADJ                                                -2A-                                              www.tax.newmexico.gov
When you calculate New Mexico tax-           dividends issued by the Federal Home         You must meet both conditions.
able income using a New Mexico net           Loan Bank, etc. (See note below.) Also
operating loss carry-forward amount,         enter interest on U.S. government obli-      CAUTION: Income earned off the
federal rules apply for modifications to     gations from your share of income from       lands of your own or your spouse’s na-
exemptions and taxable income. Use           partnerships, S corporations, limited        tion, tribe or pueblo is subject to New
your New Mexico net operating loss           liability companies or a distribution        Mexico income tax no matter where
carry-forward against taxable income         from a unit investment or simple trust.      you live.
before you apply your personal and
dependents’ exemptions.                      You may deduct dividends from mutual         Military pay of an enrolled member is
                                             funds invested in U.S. government            exempt only for times when the home
To compute the carry-forward amount          obligations according to the percent-        of record is on the member’s own In-
from a New Mexico net operating loss         age of the total fund invested in U.S.       dian nation, tribe or pueblo lands.
recognized in a previous year, add           government obligations. The fund
together the federal adjusted gross          must give investors a statement of the       Retirement or pension income is
income (AGI) figure, any federal net         amount of interest income from invest-       exempt only when the retirement or
operating loss carry-back or carry-          ments in U.S. government obligations.        pension is the result of employment
forward deduction, and any other in-                                                      on the member’s Indian nation, tribe
come not included in federal adjusted        Expenses related to tax-exempt invest-       or pueblo. Retirement or pension in-
gross income, but upon which a federal       ment income, if you deducted them            come from employment off the lands
tax is calculated (except amounts for        on your federal return, must be added        of the nation, tribe or pueblo may not
which a tax calculation is made ac-          back now to determine New Mexico             be deducted.
cording to the alternative minimum           taxable income.
tax under Section 55 of the Internal                                                      Enter the amount of qualifying income
Revenue Code). From that total, sub-         NOTE: Interest from the Government           on line 10. Enter the name of your and
tract the federal standard or itemized       National Mortgage Association (Gin-          your spouse’s (if applicable) nation,
deduction. The result is the maximum         nie Mae), Federal National Mortgage          tribe or pueblo on lines 10a and 10b.
amount of New Mexico net operating           Association (Fannie Mae), or Federal
loss that may be applied to the current      National Home Loan Mortgage Asso-            A person may not claim combined
tax return.                                  ciation (Freddie Mac), IS NOT deduct-        exemptions and deductions for more
                                             ible as interest on U.S. government          than 100% of income. You must also
Attach a schedule to your return             obligations.                                 include the exemption or deduction of
showing the tax year when each New                                                        income when you claim rebates and
Mexico net operating loss occurred.          LINE 9.                                      credits on Schedule PIT-RC. Include
The schedule also should list each           Taxable Railroad Retirement Act              your income in calculating modified
loss for each tax year for which it was      Annuities and Benefits; Taxable              gross income. See the instructions for
carried forward, including 2010.             Railroad Unemployment Insurance              Schedule PIT-RC.
                                             Act Sick Pay
Unlike a federal net operating loss                                                       LINE 11, 11a and 11b.
carry-forward, a New Mexico net op-          Deduct taxable Railroad Retirement           Exemption for Income of a Person
erating loss incurred in tax years after     Act annuities and benefits and taxable       Age 100 Years or More
1990 cannot be carried back and may          sick pay under the Railroad Unem-
only be carried forward for five years or    ployment Insurance Act, and attach           The income of a person 100 years old
until the total amount of the loss carry-    Form(s) RRB-1099 and RRB-1099R               or more is exempt from New Mexico’s
over has been used, whichever occurs         if those amounts were part of your           income tax, but only if the centenarian
first. You cannot apply a New Mexico         federal taxable income.                      cannot be claimed as a dependent by
net operating loss carry-forward until                                                    someone else. Make sure to check
the following tax year -- provided you       LINE 10, 10a and 10b.                        the box(es) on lines 11a and 11b, if
have filed a timely return -- or until the   Income of an Indian                          applicable. The Department will deny
first tax year that begins after the date                                                 your exemption if you do not check the
you file a return establishing the loss.     If you or your spouse, or both, were         box or boxes.
                                             enrolled members of a New Mexico
LINE 8.                                      federally recognized Indian nation,          To qualify, you must be 100 years or
Interest from U.S. Government                tribe or pueblo, your income is exempt       older at the end of the tax year for
Obligations                                  from base income IF:                         which you claim the exemption.
                                             •	 You lived on the land of the Indian
Enter the interest you received from             nation, tribe or pueblo of member-       Unmarried centenarians do not need to
U.S. government obligations. These               ship when you earned it, and             file a return unless they want to claim
include U.S. savings bonds, treasury         •	 You earned that income on the             rebates and credits available for low-
bills, interest on notes issued by the           lands of that nation, tribe or pueblo.   income filers.
Federal Home Loan Bank, but not
PIT-ADJ                                                   -3A-                                             www.tax.newmexico.gov
Married Centenarians. New Mexico                 the last column to locate the exemp-             LINE 13.
is a community property state. Rules             tion amount.                                     Exemption for New Mexico Medical
are different for married 100-year-olds.                                                          Care Savings Account
Married centenarians filing jointly or           The amount in the table applies to each
separately may exempt half of all com-           taxpayer on a joint return if both the           If you or your spouse are enrolled in
munity income and all of the centenar-           husband and wife are either 65 or older          a New Mexico Medical Care Savings
ian’s separate income. If you report an          or blind on the last day of the tax year.        Account, (NMMSA) established by
exemption for more — or less — than                                                               an employer, and during 2010 you
50% of total joint income, attach a              Be sure to mark the correct box(es)              have made or received contributions
statement showing a correct division             on lines 12a and 12b, if you or your             to the account or have made or re-
of community and separate income                 spouse are 65 or older or blind. The             ceived distributions from the account
and payments.                                    Department must deny your exemption              you may be entitled to claim a New
                                                 if the box(es) are blank.                        Mexico medical care savings account
Persons 100 years old or older may                                                                exemption. An NMMSA is a tax-exempt
not claim combined exemptions and                The Department at some time may                  trust or custodial account set up by a
deductions for more than 100% of                 request proof that you are blind for             self-employed individual or a small em-
income. When you claim rebates and               federal purposes. Please do not attach           ployer that maintains a high-deductible
credits on Schedule PIT-RC, include              the proof to your return.                        individual or family health plan. The
your income in calculating modified                                                               funds from the NMMSA are used to
gross income. See the instructions for           NOTE: One person cannot take de-                 pay the employee’s unreimbursed
Schedule PIT-RC.                                 ductions for being both 65 or older              medical care expenses. To qualify for
                                                 and blind. One deduction is allowed              the exemption, the qualified contribu-
For further details see Bulletin B-300.3,        per person.                                      tions or distributions must be included
New Mexico Exempts 100(+)-Year-                                                                   in federal taxable income.
Olds From Personal Income Tax.                   EXAMPLE: A married couple files
                                                 jointly. Both are 65 or older. Their fed-        Principal contributed to an NMMSA,
LINE 12, 12a and 12b.                            eral adjusted gross income is $35,000.           interest earned on an NMMSA, money
Exemption for Persons 65 or Older                According to the table on page 4A, the           paid for eligible medical expenses
or Blind                                         exemption amount is $12,000 ($6,000              from funds in an NMMSA, or money
                                                 x 2).                                            advanced to the employee by the em-
You may be eligible for an exemption                                                              ployer for eligible medical expenses
of up to $8,000 based on your filing             If the same couple was also blind, the           pursuant to the Medical Care Savings
status and your federal adjusted gross           exemption is still $12,000.                      Account Act, are exempt from New
income from line 7, Form PIT-1, if:                                                               Mexico income tax.
•	 You are 65 or older, or                       EXAMPLE: A married couple files
•	 You are not yet 65, but are consid-           jointly. One is 65. The spouse is 45             Caution: Generally, qualified contri-
   ered blind for federal income tax             and blind. Their federal adjusted gross          butions and earnings are excluded,
   purposes.                                     income is $28,000. According to the              exempted or deducted from federal
                                                 table on page 4A, the exemption is               adjusted gross income and distribu-
Find the column in Table 1, below,               $16,000 ($8,000 x 2).                            tions paid for eligible medical expenses
that matches your filing status. Then                                                             are excluded, exempted or deducted
find the row that includes your federal                                                           from federal taxable income. You may
adjusted gross income. Read across to                                                             not claim the exemption from New


           TABLE 1 - EXEMPTION TABLE FOR PERSONS 65 OR OLDER OR BLIND (See line 12 instructions)
  Married Filing Jointly, Head of                    Single                    Married Filing Separately             Amount for each
 Household, Qualifying Widow(er)                                                                                      taxpayer 65 or
                                                                                                                     older, or blind for
      Adjusted Gross Income                Adjusted Gross Income                Adjusted Gross Income               federal income tax
        Line 7, Form PIT-1                   Line 7, Form PIT-1                   Line 7, Form PIT-1                     purposes

                          But Not Over                        But Not Over                         But Not Over
        $0                $30,000            $0                $18,000            $0                $15,000       -----------$ 8,000
    30,001                  33,000       18,001                  19,500       15,001                  16,500      ----------- 7,000
    33,001                  36,000       19,501                  21,000       16,501                  18,000      ----------- 6,000
    36,001                  39,000       21,001                  22,500       18,001                  19,500      ----------- 5,000
    39,001                  42,000       22,501                  24,000       19,501                  21,000      ----------- 4,000
    42,001                  45,000       24,001                  25,500       21,001                  22,500      ----------- 3,000
    45,001                  48,000       25,501                  27,000       22,501                  24,000      ----------- 2,000
    48,001                  51,000       27,001                  28,500       24,001                  25,500      ----------- 1,000
    51,001 --------------------------    28,501 --------------------------    25,501 -------------------------    ---------------- 0

PIT-ADJ                                                           -4A-                                               www.tax.newmexico.gov
Mexico taxable income if your qualified     LINE 16.                                   also include unreimbursed and un-
contribution or distribution is excluded,   Military Active Duty Pay                   compensated medical care expenses
exempted or deducted from federal                                                      which have been included in itemized
taxable income.                             Enter the pay, wages or salaries paid      deductions on Schedule A, federal
                                            to you or your spouse for active duty      Form 1040.
Do not include excess contributions,        military service in the United States
unqualified distributions, or money         Armed Forces, if it was included in        To compute the unreimbursed and un-
rolled over into another MSA.               the federal adjusted gross income          compensated medical care expenses
                                            and reported on line 7 of Form PIT-1.      for purposes of this exemption, you
LINE 14.                                    This exemption from state income tax       may include all of the qualified ex-
Deduction for Contributions to a            applies to residents and non-residents     penses which are used to compute
New Mexico-approved Section 529             of New Mexico.                             the refundable medical care credit for
College Savings Plan                                                                   persons 65 or older reported on line
                                            Active duty, as defined in 37 USC 101,     23 of Schedule PIT-RC. Unreimbursed
Deduct contributions you made dur-          means full-time duty in active service     and uncompensated medical care ex-
ing the tax year to the New Mexico          and includes full-time training duty,      penses used to compute the medical
Education Trust Fund (to an account         annual training duty, full-time National   care expense deduction claimed on
in one of the New Mexico-approved           Guard duty, and attendance, while in       line 14, Form PIT-1 also may be used
Section 529 college savings plans)          the active service, at a school desig-     to compute the medical expenses for
for each beneficiary. Contributions         nated as a service school by law or        purposes of this exemption.
include the principal and earnings por-     by the Secretary concerned. Armed
tion of amounts rolled over to a New        forces includes the Army, Navy, Air        LINE 18.
Mexico-approved Section 529 college         Force, Marine Corps and Coast Guard.       Deduction for Organ Donation-
savings plan account from a non-New                                                    related Expenses
Mexico-approved Section 529 college         NOTE: Also see the 2010 Schedule
savings plan.                               PIT-B Instructions for lines 1 and 11      Enter any human organ donation-
                                            if you have income from within and         related expenses, not to exceed
NOTE: You may only deduct contribu-         outside New Mexico.                        $10,000, including lost wages, lodging
tions to a Section 529 Plan established                                                and travel expenses incurred during
and approved by the New Mexico              LINE 17.                                   the taxable year by the taxpayer or
Education Trust Board. See the Bul-         Medical Care Expense Exemption             the taxpayer’s dependent. “Human
letin on New Mexico Income Tax and          for Persons Age 65 Years or Older          organs” are defined as all or part of a
Your Education Trust (529) Plan on the                                                 heart, liver, pancreas, kidney, intestine,
Department’s web site or obtain one         If you or your spouse are 65 years         lung or bone marrow. A husband and
from one of the district offices.           of age or older and you paid unreim-       wife who file separate returns for a tax
                                            bursed and uncompensated medical           year in which they could have filed a
A husband and wife who file separate        care expenses of $28,000 or more           joint return may each claim only one-
returns may each claim half the deduc-      during tax year 2010, you may claim an     half of the deduction that would have
tion allowed on a joint return.             exemption of $3,000. The medical care      been allowed on a joint return.
                                            expenses may be made for the care
LINE 15.                                    of any combination of yourself, your       LINE 19.
Net Capital Gains Deduction                 spouse or dependents. The deduction        New Mexico National Guard Service
                                            is allowed for out-of-state residents      Member’s Life Insurance Reim-
You may deduct $1,000 of the net            with income tax responsibility to New      bursements Exemption
capital gains reported and claimed on       Mexico. Enter $3,000 if you qualify.
your federal tax return, or 50% of the                                                 An individual who receives a reim-
net capital gains, whichever amount         If you are eligible to claim the medical   bursement from the National Guard
is greater.                                 care expense exemption for persons         Service Member’s Life Insurance
                                            age 65 years or older, you are also        Reimbursement Fund may claim a
A husband and wife who file separate        eligible to claim the refundable medi-     personal income tax exemption in the
returns may each claim only half the        cal care credit for persons 65 years or    amount of the reimbursement. The
net capital gains deduction allowed on      older reported on line 23 of Schedule      reimbursements are issued by the New
a joint return.                             PIT-RC allowing an additional tax          Mexico Office of Military Affairs which
                                            benefit. You must complete Schedule        sends each recipient a Form 1099Misc
NOTE: A taxpayer may not claim the          PIT-RC to claim the tax credit.            for the reimbursement. Attach the Form
net capital gains deduction in addi-                                                   1099Misc to support the New Mexico
tion to credit provided by the Venture      The types of medical expenses that         National Guard member life insur-
Capital Investments Act.                    you may include are described in the       ance reimbursements tax exemption
                                            instructions for line 14, Form PIT-1       claimed.
                                            with the following exception. You may
PIT-ADJ                                                  -5A-                                             www.tax.newmexico.gov

				
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Description: Tax Exempt Adjustment Form document sample