The proposed bill establishes a new Childbirth Income Tax Credit for residents of New Mexico who give birth to a child. Taxpayers who meet the eligibility criteria 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 from the children, youth, and families department, which will issue a certificate of eligibility if the requirements are met. The bill stipulates that only one credit can be certified per taxpayer per year, and any portion of the credit that exceeds the taxpayer's income tax liability will be refunded.

Additionally, the bill outlines the process for claiming the credit, which must be done within three taxable years following the certification. The credit will be included in the tax expenditure budget, ensuring transparency regarding its annual aggregate cost. The provisions of this act will take effect for taxable years beginning on or after January 1, 2025.