45th legislature - STATE OF NEW MEXICO - first session, 2001

RELATING TO TAXATION; PROVIDING AN INCOME TAX CREDIT FOR CERTAIN PAYMENTS FOR ELEMENTARY AND SECONDARY SCHOOL TUITION.

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] TUITION TAX CREDIT.--

A. A taxpayer who files an individual New Mexico income tax return, is not a dependent of another taxpayer and whose family income for the taxable year is at or below one hundred eighty-five percent of the federal poverty level may claim a credit for tuition payments made by the taxpayer for a dependent who is enrolled in an accredited elementary or secondary school in New Mexico. The credit may be claimed in an amount equal to the tuition paid during the taxable year for which the credit is claimed, not to exceed two thousand dollars ($2,000) for each eligible dependent. The credit provided in this subsection shall be known as the "tuition tax credit".

B. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the tuition tax credit that would have been allowed on a joint return.

C. The credit provided in this section may be deducted from the taxpayer's New Mexico income tax liability for the taxable year. If the credit exceeds the taxpayer's income tax liability, the excess shall be refunded to the taxpayer.

D. Receipt of a tax credit pursuant to this section for tuition payments made to a private school does not authorize state involvement or entanglement with religious instruction or other operations of the private school.

E. As used in this section:

(1) "dependent" means "dependent" as defined in Section 152 of the Internal Revenue Code, but also includes any minor child or stepchild of the taxpayer who would be a dependent for federal income tax purposes if the public assistance contributing to the support of the child or stepchild was considered to have been contributed by the taxpayer; and

(2) "federal poverty level" means the level of income defining poverty by family size published annually in the federal register by the United States department of health and human services."

Section 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2001.