The bill amends the Working Families Tax Credit in New Mexico by significantly increasing the credit amount for eligible taxpayers. Specifically, it replaces the previous credit percentages of twenty percent and twenty-five percent for certain taxable years with a new provision that allows taxpayers to claim fifty percent of the federal earned income tax credit for which they are eligible. This change applies to residents who file individual New Mexico income tax returns and addresses eligibility for those who may have been disqualified due to identification number requirements or age restrictions.

Additionally, the bill clarifies that the working families tax credit can be deducted from an individual's income tax liability, and any excess credit beyond the liability will be refunded to the taxpayer. The new provisions will take effect for taxable years beginning on or after January 1, 2026, thereby providing a more substantial benefit to working families in New Mexico.

Statutes affected:
introduced version: 7-2-18.15