If you conducted business or earned income in New Mexico, you may be subject to New Mexico state taxes. If this applies to you, please find below the details regarding the R&D tax credit application, key tax deadlines, and extension information for 2024.
In New Mexico, businesses aiming to claim the Research & Development tax credit must complete and receive approval for an application.
In New Mexico, you may:
File your taxes online with Taxpayer Access Point (TAP)
When filing by mail, ensure that your documents are postmarked by the due date.
Federal filing is not required.
Amendments are allowed up to 3-years from the original date of filing.
Application Information
New Mexico's R&D tax credit program requires the filing and approval of an application to claim the credit. A taxpayer may apply for approval of a basic credit within one year following the end of the reporting period in which the qualified expenditure was made.
Here is how you can apply
Here is how you can apply
A taxpayer may apply for approval of a basic credit within one year following the end of the reporting period in which the qualified expenditure was made.
A taxpayer may apply for approval of the additional credit within one year following the end of the tax year in which the qualified expenditure was made
Complete Form RPD-41385
Line 1 – Describe the qualified research performed.
Line 2 – Mark this box if the expenditures were incurred for a qualified facility located within a rural area.
The amount of both the basic and additional technology jobs and research and development credit are doubled if the qualified expenditures were incurred for a qualified facility in a rural area.
Line 3 – Enter the total amount of qualified expenditures claimed. Attach a detailed list of expenditures and wages claimed with descriptions.
Line 4 – Multiply the total amount of qualified expenditures by 5%. This is the amount of your basic credit.
Line 5 – Multiply the total amount of qualified expenditures by 5% if the qualified facility is in a rural area. This is the amount of your basic credit in a rural area.
Line 6 – Multiply the total amount of qualified expenditures by 5%. This is the amount of your additional credit.
Line 7 – Multiply the total amount of qualified expenditures by 5% if the qualified facility is in a rural area. This is the amount of your additional credit in a rural area.
Line 8 – Mark this box if you are a qualified research and development small business and meet the requirements listed.
Email application along with TRD-31121 and all required documentation to:
The Department will make a determination within 120 days of the date on which the completed application is received. You may call (505) 795-1735 or send an email to check the status. If approved, the applicant will be issued a document granting the tax credit.
Required Documentation for Application
Required Documentation for Application
Application Form-41385 – Application for Technology Jobs and R&D Tax Credit
R&D Project Statement (TRD-31121) – For each project, submit a TRD-31121, Research and Development Project Statement (excel sheet).
If expenditures claimed are tied to a project number, include project numbers with the descriptions.
Detailed List of Qualified Expenditures – An itemized list of expenditures, in Excel format. This should include the date the item was purchased, a description of the item (not just a category), and amount claimed.
In excel format, an itemized list for each employee claimed to include Box 1, W2 wages or total payroll wages for the year claimed, R&D wages claimed, and percentage of time spent working on the claimed projects for each employee.
Allocation Methodology – If allocated percentage of expenditures are being claimed, a written statement explaining the cost accounting methodology used.
Additional Credits –
Box-1, W-2 wages in Excel format for all employees at the qualified facility for the year claimed on application.
Box-1, W-2 wages in Excel format for all employees at the qualified facility in the year prior to the year being claimed.
TIA – If the contact person for the credit is not the taxpayer or officer of the taxpayer, submit ACD–31102, Tax Information Authorization Tax Disclosure, allowing the Department to discuss this credit application.
Overview, Eligibility, and Limitations
Overview, Eligibility, and Limitations
Technology Jobs Tax Credit Act
Effective January 1, 2015, the Technology Jobs Tax Credit Act has been revised to include incentives for research and development for qualified small businesses.
The change in legislation applies to small business qualified expenditures for conducting qualified research at a "Qualified Facility" and making "Qualified Expenditures."
Basic Technology Jobs Tax Credit is 5% of Qualified New Mexico Expenditures (or 10% if in a rural area)
The Basic Tax Credit may be applied against the taxpayer’s compensating tax, withholding tax or gross receipts tax (excluding local option gross receipts tax), due to the state of New Mexico.
Additional Technology Jobs Tax Credit is 5% of Qualified New Mexico Expenditures (or 10% if in a rural area)
The taxpayer is also entitled to an additional 5% credit if annual payroll expenses increase by $75,000 over base payroll for every $1,000,000 in qualified expenditures claimed by the taxpayer in a tax year in the same claim.
Annual payroll expense is the wages paid or payable to employees in the state by the taxpayer in the tax year for which the taxpayer applies for an additional credit.
Base payroll expense is the wages paid or payable by the taxpayer in the tax year prior to the tax year for which the taxpayer applies for an additional credit, adjusted for any increase from the preceding tax year in the consumer price index for the United States for all items as published by the United States Department of Labor in the tax year for which the additional credit is claimed.
In a tax year during which a taxpayer has been part of a business merger or acquisition or other change in business organization, the taxpayer's base payroll expense shall include the payroll expense of all entities included in the reorganization of all positions that are included in the business entity resulting from the reorganization.
The Additional Tax Credit may be applied against the taxpayer’s personal or corporate income tax.
Rural Area
Rural Area means any area of the state other than the state fairgrounds, an incorporated municipality with a population of thirty thousand or more according to the most recent federal decennial census and any area within three miles of the external boundaries of the incorporated municipality defined above.
Qualified Facility
Qualified Facility
A factory, mill, plant, refinery, warehouse, dairy, feedlot, building or complex of buildings located in New Mexico at which qualified research is conducted.
These include the land on which the facility is located, and all machinery, equipment and other real and tangible personal property located at or within the facility and used in connection with the operation of the facility.
Any facility operated by the taxpayer for the United States is excluded.
Qualified Expenditures
Qualified Expenditures
Any expenditure or allocated portion of an expenditure connected to qualified research at a qualified facility. Such expenditures include:
Depletable land and rent paid or incurred for land Improvements
Allowable amounts paid or incurred to operate or maintain a facility
Buildings
Equipment
Computer software
Computer software upgrades
Consultants and contractors performing work in New Mexico
Payroll
Technical books and manuals
Test materials
Qualified expenditures EXCLUDE any expenditure:
On property owned by a municipality or county in connection with an industrial revenue bond project,
On property for which the taxpayer has received any credit under the Investment Credit Act,
On property owned by the taxpayer or affiliate before July 3, 2000, or
On research and development expenditures reimbursed by a person who is not an affiliate of the taxpayer. If an allocation of expenditure is claimed, the cost accounting methodology used for the allocation of the expenditure shall be the same cost accounting methodology used by the taxpayer in its other business activities.
Eligible Entities
C-Corporations, S-Corporations, LLCs, Partnerships
Credit Carryforward
Any amount of approved additional credit not claimed against the taxpayer's income tax or corporate income tax due for a tax year or refunded to the taxpayer may be carried forward for a period of up to 3 years from the date of the original claim.
Credits cannot be carried back to prior tax years.
The research credit is refundable.
Credit Limitations
The taxpayer is also entitled to an additional credit if annual payroll expenses increase by $75,000 over base payroll for every $1,000,000 in qualified expenditures claimed by the taxpayer in the calendar year claimed on the application.
No taxpayer may claim an amount of approved basic credit for any reporting period that exceeds the sum of the taxpayer’s compensating tax, withholding tax and gross receipts tax (excluding local option gross receipts tax) due for that reporting period.
No taxpayer may claim an amount of approved basic credit for any reporting period that EXCEEDS the sum of the taxpayer’s
compensating tax,
withholding tax and
gross receipts tax (excluding local option gross receipts tax) due for that reporting period.
Except for Qualified Research & Development Small Businesses, no taxpayer may claim an amount of additional credit for any reporting period that exceeds the amount of the taxpayer’s personal or corporate income tax due for that reporting period.
Married individuals may each claim only one-half the additional credit.
A pass-through entity (PTE) approved for additional credit may pass the additional credit to its owners, partners or members using Form RPD-41368, Notice of Distribution of Technology Jobs and Research and Development Tax Credit.
Attach a payroll expense summary that reflects both annual and base payroll expenses.
S-Corporation / Partnership
You must file in New Mexico by March 15, 2025.
Applicable R&D Forms
Form RPD-41386 – Technology Jobs and Research and Development Tax Credit
File the above form with the following tax forms:
Form S-Corp – S-Corporation Income Tax Return
Form PTE – Income and Information Return for Pass-Through Entities
Extension to File Taxes in New Mexico for 2024
Taxes owed in New Mexico for the tax year 2024 must be paid by March 15, 2025.
New Mexico automatically grants a 6-month extension on filing pass-through entity income tax returns if a federal extension is filed.
If the corporation has not received a federal extension, you may request an extension from the Department by filing Form RPD-41096.
The extension deadline is September 15, 2025.
Note that this extension pertains to the filing deadline, not the payment deadline.
Payment of taxes owed is still due by March 15, 2025.
C-Corporation
You must file in New Mexico by April 15, 2025.
Applicable R&D Forms
Form RPD-41386 – Technology Jobs and Research and Development Tax Credit
File the above form with the following tax forms:
Form CIT-1 – New Mexico Corporate Income and Franchise Tax Return
Extension to File Taxes in New Mexico for 2024
Taxes owed in New Mexico for the tax year 2024 must be paid by April 15, 2025.
New Mexico automatically grants a 6-month extension on filing corporate income tax returns if a federal extension is filed.
If the corporation has not received a federal extension, you may request an extension from the Department by filing Form RPD-41096.
The extension deadline is October 15, 2025.
Note that this extension pertains to the filing deadline, not the payment deadline.
Payment of taxes owed is still required by April 15, 2025.
Sole-Proprietorship
Sole-Proprietorship
You must file in New Mexico by April 15, 2025.
Applicable R&D Forms
Not Eligible
File the above form with the following tax forms:
Form PIT-1 – New Mexico Personal Income Tax Return
Extension to File Taxes in New Mexico for 2024
Taxes owed in New Mexico for the tax year 2024 must be paid by April 15, 2025.
No separate extension filing is required in New Mexico.
New Mexico automatically grants a 6-month extension for C-Corporation tax returns.
The extension deadline is October 22, 2025.
Note that this extension pertains to the filing deadline, not the payment deadline.
Payment of taxes owed is still required by April 15, 2025.
References
We strive to ensure the accuracy of the information on this page, but it is not intended as tax or legal advice. Please use your own professional judgment and consult with a tax professional. Any advice you provide in connection with tax return preparation must comply in full with the requirements of IRS Circular 230.