The proposed bill establishes a new Childbirth Income Tax Credit for residents of New Mexico who give birth to a child. Taxpayers who are not dependents of another individual can claim a credit of $7,000 against their tax liability for the taxable year in which the child is born. To qualify for the credit, taxpayers must apply for certification of eligibility from the children, youth, and families department, which will issue a certificate detailing the amount of the credit and the taxable years it can be claimed. The bill stipulates that only one credit can be certified per taxpayer per year, and any portion of the credit exceeding the taxpayer's income tax liability will be refunded.

The provisions of this act will take effect for taxable years beginning on or after January 1, 2025. Additionally, the bill mandates that the Childbirth Income Tax Credit be included in the tax expenditure budget, ensuring transparency regarding its annual aggregate cost.