Rod wrote:

- quote -

The NM Energy Tax rebate was issued "in advance" to any NM
taxpayer that filed a 2004 NM tax return. The rebate checks
were mailed in the 4th quarter of 2005. Any NM taxpayer
filing a 2005 tax return who did not receive the "advance"
payment can claim the rebate on the 2005 tax return. See the
NM tax instructions for Line 18 of the Pit-1.

As a side note, the IRS has informed NM tax authorities that
the rebates are taxable as Other Income on the 1040. There
are many of us professionals that believe the IRS is way off
base on this issue. Any professional preparing your tax
return would have to advise you of this and you could make
your own decision as to whether to include the advance on
your 2005 federal return or if you get it in 2005, on your
2006 return.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

The NM energy rebate was issued around Nov. 2005. The IRS has
determined that this money is taxable income to the recipients
(although some accountants in the state disagree.) The preparers in my
office are including that income on line 21 (other income) of the 1040,
not subject to self-employment tax. Not sure how you would do this on
TurboTax. If all else fails, just go to the form and enter it on line
21.

The income is not taxable to the state of NM, so you will have to use
form PIT-ADJ to subtract the income from federal AGI. There is a
specific line on the ADJ for 2005 (don't remember the line number)
where you would enter the energy rebate amount, which will end up being
subtracted on page 1 of the PIT.

Dennis

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

When the fuel prices starting going way up, Governor Bill
Richardson on New Mexico was concerned that many people
would be adversely affected by that, so he had a special New
Mexico state income tax refund issued for many qualifying
New Mexicans. This was sometime in the second half of 2005.
I am certain that it was meant to apply to the 2005 tax
year, not the 2004 tax year, because New Mexico state income
tax refunds for 2004 were already issued earlier in the
year. But now I'm trying to work with Turbo Tax Deluxe 2005
and specify that the refund was for 2005 and it refuses to
let me do that.

So, bottom line: does anyone know for certain that those
special New Mexico state income tax is for 2005?

Rod

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >