EXEMPT TIPS FROM INCOME TAX

HB 484 would exempt tips received by New Mexico residents as compensation for services (like from restaurant servers or bartenders) from state income tax calculations. This directly affects workers in tipped occupations who currently have tips counted toward their taxable income. The bill creates a new tax exemption allowing these workers to exclude tip earnings from their taxable income starting in 2025. The policy change would reduce the state income tax burden for eligible service industry workers. The bill was referred to relevant committees but was postponed indefinitely in June 2025.