This bill proposes significant changes to New Mexico's taxation system by repealing the Working Families Tax Credit and introducing the Earned Income Tax Credit (EITC). The EITC will allow eligible individuals to claim a credit against their tax liability based on earned income, with specific percentages and phaseout amounts determined by the number of qualifying children. Additionally, a new Foster Parent and Guardian Income Tax Credit is established, allowing foster parents or guardians to claim $250 for each month they care for a child, with a maximum annual credit of $3,000. The bill also includes provisions for adjusting the EITC amounts for inflation starting in 2026.

Moreover, the bill amends the gross receipts tax deduction for health care practitioners to include coinsurance paid by patients, increases liquor excise tax rates, and establishes the Tribal Alcohol Harms Alleviation Fund. The new liquor excise tax structure sets specific rates based on alcohol content, with detailed tax liabilities for wine transfers. The bill allocates liquor excise tax revenues to various funds, including 39% to the local DWI grant fund and 12.5% to the tribal alcohol harms alleviation fund, aimed at supporting alcohol harm prevention and treatment services on Indian lands. The provisions will take effect on different dates, with some sections starting on January 1, 2026, and others on July 1, 2025, while a delayed repeal is set for January 1, 2031.

Statutes affected:
introduced version: 7-2-18.15
TR substitute: 7-1-10, 7-31-2, 7-31-4, 7-31-7, 7-31-8, 7-31-26, 7-2-18.15
Final Version: 7-2-18.15, 7-9-93, 7-17-5, 7-1-6.40