Bill > HB106

This bill establishes a new "home-based child care income tax credit" for individuals filing New Mexico income tax returns who are not dependents themselves and do not enroll their eligible dependent children in state-funded or private childcare or pre-kindergarten programs. A dependent child is defined as a child age five or younger who meets federal dependency requirements, or a minor child or stepchild whose support is partially covered by public assistance but would otherwise qualify as a dependent. The credit is set at $1,000 per month for each month a dependent child is not yet eligible for public school enrollment. To claim this credit, taxpayers must apply for certification from the early childhood education and care department, which will issue rules for this process and provide eligibility certificates electronically to the tax department. For taxable years beginning in 2027 and later, the credit amount will be adjusted annually for inflation based on the consumer price index, with the adjusted amount rounded down to the nearest dollar and not reduced below the previous year's amount. Any portion of the credit that exceeds a taxpayer's income tax liability will be refunded. Married individuals filing separately can each claim half of the credit they would have received on a joint return. This credit will be included in the state's tax expenditure budget, and its provisions apply to taxable years beginning on or after January 1, 2026.

Business and Industry

https://www.nmlegis.gov/Legislation/Legislation?chamber=H&legtype=B&legno=106&year=26