Copyright © 2022 Albuquerque Journal
SANTA FE – New Mexicans with children would get an annual tax credit of up to $350 per child under a House bill that sparked debate – but not a vote – on Saturday.
The proposed new income tax credit, House Bill 213, could end up being included in a tax package that’s still being crafted by lawmakers in the final days of this year’s 30-day legislative session.
It would provide a tax credit that would vary in amount depending on a parent or legal guardian’s income levels.
For instance, a resident with less than $25,000 in total annual income would be eligible for a tax credit of $350 per child, while those making more than $350,000 annually could get a $50 credit for each child.
The tax credit would be refundable, meaning it could be applied to any tax liabilities incurred by an individual or family.
Backers of the measure said it could lead to improved New Mexico health and educational outcomes by alleviating the financial strain on low-income families.
“We think this policy is really crucial right now because we know that so many of our families with kids are still struggling,” said Amber Wallin, the executive director of New Mexico Voices for Children, a nonprofit group that supports the proposed tax credit.
But critics said the state already has numerous 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 will we say we have sufficiently provided for these folks that are not capable of providing for themselves?”
Members of the House Taxation and Revenue Committee heard testimony on the bill, including from some workers who spoke in Spanish, but did not vote on the bill as they work to come up with a final tax framework.
Several lawmakers also shared stories of their own financial hardships in a state with one of the nation’s highest poverty rates.
Rep. Micaela Lara Cadena, D-Mesilla, one of the bill’s sponsors, related her experience raising children as a college student.
“There were still moments when I had to look ahead and figure out what bill I was going to pay … with limited dollars in those accounts,” said Cadena, who also cited a recent study that found more than 35% of Latino families in New Mexico have less than $100 in their checking accounts.
If approved, the proposed child tax credit would cost an estimated $144.8 million in the coming budget year, according to a fiscal analysis of the legislation.
A budget bill approved by the House that’s pending in the Senate allows for roughly $400 million in tax code changes to be enacted during this year’s session.