The Department denied the Taxpayer’s claim for a credit on their 2021 personal income tax (PIT) return for taxes paid to another state by a resident individual because of the notation that the Taxpayer had already used the PIT-B to allocate and apportion the income to avoid being taxed by both states on the same income. The Taxpayers protested, arguing that New Mexico failed to “allow equitable allocation of income.” The Hearing Officer upheld the Department’s denial, finding that a credit for taxes paid to another state can only be claimed when both states tax the same income. Because the Taxpayers were able to allocate income on the PIT-B, the resident New Mexico taxpayers did not qualify for the credit for taxes paid to another state under Section 7-2-13 NMSA 1978. The protest was denied.
