The proposed legislation establishes two new tax credits in New Mexico: the Child Care Facility Donation Income Tax Credit and the Child Care Facility Donation Corporate Income Tax Credit. Both credits are available for donations made to licensed child care facilities and are applicable for taxable years prior to January 1, 2037. Taxpayers can claim a credit equal to the amount donated, capped at $500,000 per taxpayer. To qualify, donations must be monetary, made to qualifying facilities that meet state subsidy enrollment requirements, and used to promote child care for children aged twelve and under. The early childhood education and care department will certify eligibility for the credits, and the total amount of credits certified in a calendar year is limited to $10 million.

Additionally, the bill outlines the application process for taxpayers seeking certification, which must be completed on prescribed forms. It specifies that any portion of the credit exceeding a taxpayer's income tax liability will be refunded. The legislation also includes definitions for "donation" and "licensed child care facility," ensuring clarity on eligibility. The provisions of this act will take effect for taxable years beginning on or after January 1, 2026.