HOUSE BILL 200

54th legislature - STATE OF NEW MEXICO - second session, 2020

INTRODUCED BY

Micaela Lara Cadena and Rebecca Dow

 

 

 

 

 

AN ACT

RELATING TO TAXATION; CREATING THE EARLY CHILDHOOD WORKER INCOME TAX CREDIT; CREATING A GROSS RECEIPTS TAX DEDUCTION FOR THE SALE OF CHILD CARE ASSISTANCE THROUGH A LICENSED EARLY CHILDHOOD PROGRAM.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. A new section of the Income Tax Act is enacted to read:

     "[NEW MATERIAL] EARLY CHILDHOOD WORKER INCOME TAX CREDIT.--

          A. For taxable years prior to January 1, 2025, a taxpayer who is not a dependent of another individual and who is an early childhood worker may apply for, and the department may allow, a credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act. The tax credit provided by this section may be referred to as the "early childhood worker income tax credit".

          B. The early childhood worker income tax credit shall not exceed the following amounts:

                (1) one thousand five hundred dollars ($1,500) for an early childhood worker who has achieved a child development certificate, a certificate in infant family studies or a certificate in early childhood administration as awarded by the early childhood education and care department;

                (2) three thousand dollars ($3,000) for an early childhood worker who has achieved an associate degree in early childhood education from an accredited post-secondary educational institution; and

                (3) five thousand dollars ($5,000) for an early childhood worker who has achieved a bachelor's degree in early childhood education from an accredited post-secondary educational institution.

          C. A taxpayer may claim an early childhood worker income tax credit for the taxable year in which the taxpayer meets the requirements of this section. To receive the tax credit, a taxpayer shall apply to the department on forms and in the manner prescribed by the department. The application shall include a certification from the early childhood education and care department certifying that the taxpayer meets the requirements as an early childhood worker and the education requirements pursuant to Subsection B of this section.

          D. That portion of an early childhood worker income tax credit that exceeds a taxpayer's tax liability in the taxable year in which the credit is claimed shall be refunded to the taxpayer.

          E. Married individuals filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the early childhood worker income tax credit that would have been claimed on a joint return.

          F. A taxpayer allowed a tax credit pursuant to this section shall report the amount of the credit to the department in a manner required by the department.

          G. The department shall compile an annual report on the early childhood worker income tax credit that shall include the number of taxpayers approved by the department to receive the credit, for each level of credit, the aggregate amount of credits approved and any other information necessary to evaluate the credit. The department shall present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the tax credit.

          H. As used in this section:

                (1) "early childhood provider" means a child care provider licensed by or registered with the early childhood education and care department to provide child care services in the provider's home or other facility; and

                (2) "early childhood worker" means an individual who:

                     (a) is employed by an early childhood provider or is an early childhood provider who is a sole proprietor;

                     (b) works at least thirty hours per week for thirty-two weeks per year for an early childhood provider or as an early childhood provider sole proprietor; and

                     (c) has been awarded a certificate or degree described in Paragraphs (1) through (3) of Subsection B of this section."

     SECTION 2. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS--CHILD CARE ASSISTANCE THROUGH A LICENSED EARLY CHILDHOOD PROGRAM.--

          A. Prior to July 1, 2025, receipts from the sale of child care assistance services by a taxpayer pursuant to a contract with the early childhood education and care department to provide such services through an early childhood program licensed by that department may be deducted from gross receipts.

          B. A taxpayer allowed a deduction pursuant to this section shall report the amount of the deduction separately in a manner required by the department.

          C. The department shall compile an annual report on the deduction provided by this section that shall include the number of taxpayers that claimed the deduction, the aggregate amount of deductions claimed and any other information necessary to evaluate the effectiveness of the deduction. The department shall present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the deduction."

     SECTION 3. APPLICABILITY.--The provisions of Section 1 of this act apply to taxable years beginning on or after January 1, 2020.

     SECTION 4. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2020.

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