54th legislature - STATE OF NEW MEXICO - first session, 2019

RELATING TO TAXATION; CREATING A DEPENDENT DEDUCTION PURSUANT TO THE INCOME TAX ACT.

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] DEDUCTION FROM NET INCOME FOR CERTAIN DEPENDENTS.--

A. A taxpayer who is not a dependent of another individual may claim a deduction from net income in an amount equal to four thousand dollars ($4,000) for each dependent claimed on the taxpayer's return; provided that the exemption amount pursuant to Section 151 of the Internal Revenue Code, as that section may be amended of renumbered, means zero. The deduction provided in this section may be referred to as the "dependent deduction".

B. 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 dependent deduction that would have been claimed on a joint return.

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

D. 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 annual report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the deduction.

E. As used in this section, "dependent" means "dependent" as defined in Section 152 of the Internal Revenue Code, as that section may be amended or renumbered."

SECTION 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2019.