SANTA FE — New Mexicans with children would get an annual tax credit of up to $350 per child under a House bill that prompted debate — but not a vote — on Saturday.
The proposed new tax credit, House Bill 213, could end up being included in a tax package that is still being worked out by lawmakers in the final days of this 30-day legislative session. year.
It would offer a tax credit whose amount would vary according to the income level of a parent or legal guardian.
For example, a resident with a total annual income of less than $25,000 would be eligible for a tax credit of $350 per child, while those earning more than $350,000 per year could get a credit of $50 for each child.
The tax credit would be refundable, meaning it could be applied to any tax debt incurred by an individual or family.
Proponents of the measure said it could lead to improved health and education outcomes in New Mexico by easing the financial strain on low-income families.
“We think this policy is really crucial right now because we know so many of our families with children are still struggling,” said Amber Wallin, executive director of New Mexico Voices for Children, a nonprofit group that supports the proposed tax credit.
But critics said the state already has many assistance programs for low-income residents, including Medicaid health care coverage and other tax breaks.
“My concern is, ‘When is enough?'” asked Rep. Larry Scott, R-Hobbs. “When shall we say that we have sufficiently provided for those people who are not able to provide for themselves?”
Members of the House Taxation and Revenue heard testimony about the bill, including some workers who spoke Spanish but did not vote on the bill as they struggled to come up with a framework final tax.
Several lawmakers also shared stories of their own financial struggles in a state with one of the highest poverty rates in the nation.
Representative Micaela Lara Cadena, D-Mesilla, one of Bill’s sponsors, shared her experience raising children as a student.
“There were still times when I had to anticipate and figure out what bill I was going to pay…with limited dollars on those accounts,” said Cadena, who also cited a recent study that found more than 35% of families Latin Americans from New Mexico have less than $100 in their checking accounts.
If approved, the proposed child tax credit would cost about $144.8 million in the next fiscal year, according to a financial analysis of the legislation.
A budget bill approved by the House and pending in the Senate allows about $400 million in tax code changes to pass during this year’s session.