underscored material = new
[bracketed material] = delete
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
SENATE BILL 294
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Heather Berghmans and Christine Chandler and Angel M. Charley
and Cindy Nava
AN ACT
RELATING TO TAXATION; INCREASING THE CHILD INCOME TAX CREDIT
FOR QUALIFYING CHILDREN UNDER THE AGE OF SIX.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-2-18.34 NMSA 1978 (being Laws 2022,
Chapter 47, Section 5, as amended) is amended to read:
"7-2-18.34. CHILD INCOME TAX CREDIT.--
A. For taxable years prior to January 1, 2032, a
taxpayer who is a resident and is not a dependent of another
individual may apply for, and the department may allow, a
credit against the taxpayer's tax liability imposed pursuant to
the Income Tax Act for each qualifying child of the taxpayer.
The tax credit provided by this section may be referred to as
the "child income tax credit".
B. Except as provided in [Subsection D ] Subsections
.230468.1 underscored material = new
[bracketed material] = delete
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
C and E of this section, the child income tax credit may be
claimed as shown in the following table:
Adjusted gross income is Amount of credit per
Over But not over qualifying child is
$ 0 $ 25,000 $600
25,000 50,000 400
50,000 75,000 200
75,000 100,000 100
100,000 200,000 75
200,000 350,000 50
350,000 25.
C. For each qualifying child under age six, the
amount of credit shown in Subsection B of this section, as
adjusted pursuant to Subsection E of this section, shall be
multiplied by two.
[C.] D. If a taxpayer's adjusted gross income is
less than zero, the taxpayer may claim a tax credit in the
amount shown in the first row of the table provided in
Subsection B of this section.
[D.] E. For the 2024 taxable year and each
subsequent taxable year, the amount of credit shown in the
table in Subsection B of this section shall be adjusted to
account for inflation. The department shall make the
adjustment by multiplying each amount of credit by a fraction,
the numerator of which is the consumer price index ending
.230468.1
- 2 - underscored material = new
[bracketed material] = delete
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
during the prior taxable year and the denominator of which is
the consumer price index ending in tax year 2022. The result
of the multiplication shall be rounded down to the nearest one
dollar ($1.00), except that if the result would be an amount
less than the corresponding amount for the preceding taxable
year, then no adjustment shall be made.
[E.] F. To receive a child income tax credit, a
taxpayer shall apply to the department on forms and in the
manner prescribed by the department.
[F.] G. That portion of a child income tax credit
that exceeds a taxpayer's tax liability in the taxable year in
which the credit is claimed shall be refunded.
[G.] H. Married individuals filing separate returns
for a taxable year for which they could have filed a joint
return may each claim only one-half of the child income tax
credit that would have been claimed on a joint return.
[H.] I. A taxpayer allowed a tax credit pursuant to
this section shall report the amount of the credit to the
department in a manner required by the department.
[I.] J. The department shall compile an annual
report on the child income tax credit that shall include the
number of taxpayers approved by the department to receive the
credit, the aggregate amount of credits approved and any other
information necessary to evaluate the effectiveness of the
credit. The department shall compile and present the annual
.230468.1
- 3 - underscored material = new
[bracketed material] = delete
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
report to the revenue stabilization and tax policy committee
and the legislative finance committee with an analysis of the
cost of the tax credit.
[J.] K. As used in this section:
(1) "consumer price index" means the consumer
price index for all urban consumers published by the United
States department of labor for the month ending September 30;
and
(2) "qualifying child" means "qualifying
child" as defined by Section 152(c) of the Internal Revenue
Code, as that section may be amended or renumbered, but
includes any minor child or stepchild of the taxpayer who would
be a qualifying child for federal income tax purposes if the
public assistance contributing to the support of the child or
stepchild was considered to have been contributed by the
taxpayer."
SECTION 2. APPLICABILITY.--The provisions of this act
apply to taxable years beginning on and after January 1, 2025.
- 4 -
.230468.1