2023 New Mexico Statutes › Chapter 7 - Taxation › Article 2 - Income Tax General Provisions › Section 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 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. 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. 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 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. 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. 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. 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. 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. 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 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. 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.
History:
Laws 2022, ch. 47, § 5; 2023, ch. 211, § 9.
ANNOTATIONS
The 2023 amendment,
effective June 16, 2023, increased the child tax credit for the lowest three income levels, and provided that the child tax credit amounts shall be adjusted annually to account for inflation; in Subsection A, after "For taxable years", deleted "beginning January 1, 2023 and"; in Subsection B, in the introductory clause, added "Except as provided in Subsection D of this section"; in the table, after the first occurrence of $25,000, changed "175" to "600", after the first occurrence of "50,000", deleted "150" and added "400", and after the first occurrence of "75,000", deleted "125" and added "200"; and added a new Subsection D; redesignated former Subsections D through I as Subsections E through J, respectively; and in Subsection J, added Paragraph J(1) and new paragraph designation "(2)".
Applicability.
— Laws 2023, ch. 211, § 43 provided:
A. The provisions of Laws 2023, ch. 211, § 9 apply to taxable years beginning on or after January 1, 2023.
B. The provisions of Laws 2023, ch. 211, §§ 31 through 35 apply to film production companies that commence principal photography for a film or commercial audiovisual product on or after July 1, 2023.