The proposed bill establishes a new income tax credit for taxpayers who contribute to qualifying foster care organizations in New Mexico. This credit, known as the "qualifying foster care organization income tax credit," allows eligible taxpayers to claim a credit of $500 for single individuals and $1,000 for married couples filing jointly against their tax liability. To qualify for the credit, taxpayers must provide documentation of their contributions and the qualifying organization's compliance with specific requirements, including federal tax-exempt status and a commitment to spending at least 50% of their budget on foster care services.

Additionally, the bill outlines the application process for taxpayers seeking certification for the credit, stipulating that only one credit can be claimed per taxpayer per year. Any portion of the credit that exceeds the taxpayer's liability can be carried forward for up to five years. The bill also defines key terms related to foster care services and establishes criteria for what constitutes a qualifying foster care organization. The provisions of this act will take effect for taxable years beginning on or after January 1, 2025.