The base credit and what counts as New Mexico spend
The credit is 25% of direct production and postproduction expenditures made in New Mexico and subject to New Mexico taxation, for productions starting principal photography on or after July 1, 2023. It is a refundable tax credit, so the production company files a New Mexico return and receives the balance as a refund after TRD approves the claim. A company can also assign the payment once, in full or in part, to a financial institution or other authorized third party.
"Subject to New Mexico taxation" is the test that disqualifies lines. TRD's FYI-370 lists what it will reject:
- Purchases from vendors with no physical address and resident employee in New Mexico, including internet orders
- Flights booked directly with an airline, or that don't start or end in New Mexico (book through a New Mexico travel agent)
- Entertainment, gifts over $100 a person, and family travel
- Nonresident performers without New Mexico withholding at the maximum rate
Some lines count only up to a limit: lodging to $300 per person per night, vehicle leases to $150 per day, on-camera artwork or jewelry to $2,500 an item. Box rentals qualify when a New Mexico resident crew member supplies the kit along with their services.
Uplifts and how they stack
| Uplift | Rate | Condition |
|---|---|---|
| Rural | +10% | Goods, services, and work provided on location at least 60 miles from the city hall of the county seat of a Class A county with net taxable value over $7.5 billion. TRD publishes the map. |
| TV pilot or series | +5% | Standalone pilot intended for NM series, or a series with an order of 6+ episodes, each with a $50,000+ New Mexico budget |
| Qualified production facility | +5% | Expenses incurred at a qualified stage (7,000+ sq ft, 18 ft ceiling) or standing set |
The series and facility uplifts are either/or, so the ceiling is 40%. The rural uplift excludes nonresident below-the-line crew, and rentals leased outside the rural zone are prorated by the days used inside it.
Worked example: a $1,000,000 feature
A western spends $700,000 in New Mexico: $300,000 in resident crew wages and $400,000 with New Mexico vendors. Twelve of its 20 shoot days are at a ranch outside the rural line, and $280,000 of the spend is provided there. It brings in three nonresident department heads (DP, gaffer, production designer) earning $50,000 combined. Total NM below-the-line wages are $350,000.
- Base: $700,000 x 25% = $175,000
- Rural uplift: $280,000 x 10% = $28,000
- Nonresident BTL crew: wages eligible up to $350,000 x 15% = $52,500, so all $50,000 counts. $50,000 x 15% = $7,500. The five-position limit for budgets up to $2.75 million isn't exceeded.
- Total: $210,500
At $5,000,000 with $3,500,000 of New Mexico spend on stages at a qualified facility, the facility uplift gives 30%: $3,500,000 x 30% = $1,050,000. That's below the $5,000,000 threshold that triggers a CPA audit, so TRD reviews the ledger directly.
Caps you can hit
Credits for services of nonresident performing artists are capped at $5 million per production. A New Mexico film partner (a company that bought or signed a 10-year lease on a qualified facility) can claim up to $10 million more per production for nonresident performers, directors, producers, writers, and editors, within a $40 million yearly aggregate.
The statewide cap is on credits paid per fiscal year. TRD's page lists $140 million for fiscal 2026, and FYI-370 describes the statutory schedule rising $10 million a year through fiscal 2028 and holding at $160 million from fiscal 2029. TRD posts monthly totals of credits claimed, so check remaining capacity before you promise a financier a payment date.
Applying and getting paid
- Register the production with the New Mexico Film Office before shooting. The film office approves eligibility; TRD decides which expenses qualify.
- Collect New Mexico residency declarations (Form RPD-41271) with a driver's license or state ID for every resident.
- Within one year of the last New Mexico expenditure, send TRD Form RPD-41418, the film office approval, and a ledger in Excel whose totals match the application. Add a New Mexico CPA's audit if the credit is over $5 million.
- TRD has 120 days from a complete package to approve or deny.
- File the New Mexico income tax return for each year of spend with Schedule CR and Form RPD-41228 to receive the refund.
Nearby states
Oklahoma rebates 20% to 30% under a $30 million yearly cap and requires only $50,000 in spend. New Mexico's 25% refundable base is higher and its annual cap is five times larger. Compare Arizona, Colorado, Texas, and Utah on the incentives hub, run budgets through the incentive calculator, and read how film tax credits work for the cash-flow side. Our qualified spend entry explains the general concept TRD's rules build on.
Storiara's budgeting feature organizes costs into above the line, below the line, post, and other.