0001| SENATE BILL 119 | 0002| 43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998 | 0003| INTRODUCED BY | 0004| SUE F. WILSON | 0005| | 0006| | 0007| | 0008| | 0009| | 0010| AN ACT | 0011| RELATING TO TAXATION; ENACTING SECTIONS OF THE INCOME TAX ACT | 0012| AND THE CORPORATE INCOME AND FRANCHISE TAX ACT TO PROVIDE TAX | 0013| CREDITS FOR EMPLOYMENT OF LONG-TERM FAMILY ASSISTANCE | 0014| RECIPIENTS. | 0015| | 0016| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0017| Section 1. A new section of the Income Tax Act is | 0018| enacted to read: | 0019| "[NEW MATERIAL] WELFARE-TO-WORK TAX CREDIT.-- | 0020| A. Any taxpayer who files an individual New Mexico | 0021| income tax return and is not a dependent of another taxpayer | 0022| and is entitled to claim the federal welfare-to-work credit | 0023| provided by 26 U.S.C. Section 51A with respect to a state- | 0024| qualified employee may take a tax credit equal to fifty | 0025| percent of the amount of the welfare-to-work credit claimed | - 1 - 0001| and allowed under 26 U.S.C. Section 51A with respect to that | 0002| employee. | 0003| B. For the purposes of this section: | 0004| (1) "high-unemployment county" means a county | 0005| in which the unemployment rate as reported by the labor | 0006| department exceeds ten percent in six or more months of the | 0007| calendar year preceding the year for which the tax credit | 0008| provided by this section is claimed; and | 0009| (2) "state-qualified employee" means a "long- | 0010| term family assistance recipient", as that term is defined in | 0011| 26 U.S.C. Section 51A(c), who resides in a high-unemployment | 0012| county during the period of employment for which the welfare- | 0013| to-work credit provided by 26 U.S.C. Section 51A applies with | 0014| respect to that employee. | 0015| C. The labor department shall determine whether | 0016| the employee is a state-qualified employee and, if the | 0017| employee is a state-qualified employee, certify that fact to | 0018| the employer. The taxpayer claiming the tax credit provided | 0019| by this section shall provide a copy of the certification with | 0020| respect to each employee for which the tax credit is claimed. | 0021| D. By July 1, 1998 and by January 31 of each | 0022| subsequent year, the labor department shall certify to the | 0023| taxation and revenue department the high-unemployment counties | 0024| for the preceding calendar year. | 0025| E. A husband and wife who file separate returns | - 2 - 0001| for a taxable year in which they could have filed a joint | 0002| return may each claim only one-half of the tax credit provided | 0003| by this section that would have been allowed on a joint | 0004| return. | 0005| F. A taxpayer who otherwise qualifies may claim | 0006| his pro rata share of the tax credit provided by this section | 0007| with respect to state-qualified employees employed by a | 0008| partnership or other business association of which the | 0009| taxpayer is a member. The total tax credit claimed by all | 0010| members of the partnership or association shall not exceed the | 0011| amount of tax credit provided pursuant to Subsection A of this | 0012| section with respect to each state-qualified employee for | 0013| which the credit is allowed. | 0014| G. The tax credit provided by this section may | 0015| only be deducted from the taxpayer's income tax liability. | 0016| Any portion of the tax credit provided by this section that | 0017| remains unused at the end of the taxpayer's taxable year may | 0018| be carried forward for three consecutive taxable years." | 0019| Section 2. A new section of the Corporate Income and | 0020| Franchise Tax Act is enacted to read: | 0021| "[NEW MATERIAL] WELFARE-TO-WORK TAX CREDIT.-- | 0022| A. Any taxpayer who files a New Mexico corporate | 0023| income tax return and who is entitled to claim the federal | 0024| welfare-to-work credit provided by 26 U.S.C. Section 51A with | 0025| respect to a state-qualified employee may take against the | - 3 - 0001| taxpayer's corporate income tax liability a tax credit equal | 0002| to fifty percent of the amount of the welfare-to-work credit | 0003| claimed and allowed under 26 U.S.C. Section 51A with respect | 0004| to that employee. | 0005| B. For the purposes of this section: | 0006| (1) "high-unemployment county" means a county | 0007| in which the unemployment rate as reported by the labor | 0008| department exceeds ten percent in six or more months of the | 0009| calendar year preceding the year for which the tax credit | 0010| provided by this section is claimed; and | 0011| (2) "state-qualified employee" means a "long- | 0012| term family assistance recipient", as that term is defined in | 0013| 26 U.S.C. Section 51A(c), who resides in a high-unemployment | 0014| county during the period of employment for which the welfare- | 0015| to-work credit provided by 26 U.S.C. Section 51A applies with | 0016| respect to that employee. | 0017| C. The labor department shall determine whether | 0018| the employee is a state-qualified employee and, if the | 0019| employee is a state-qualified employee, certify that fact to | 0020| the employer. The taxpayer claiming the tax credit provided | 0021| by this section shall provide a copy of the certification with | 0022| respect to each employee for which the tax credit is claimed. | 0023| D. By July 1, 1998 and by January 31 of each | 0024| subsequent year, the labor department shall certify to the | 0025| taxation and revenue department the high-unemployment counties | - 4 - 0001| for the preceding calendar year. | 0002| E. The tax credit provided in this section may | 0003| only be deducted from the taxpayer's corporate income tax | 0004| liability. Any portion of the tax credit provided by this | 0005| section that remains unused at the end of the taxpayer's | 0006| taxable year may be carried forward for three consecutive | 0007| taxable years." | 0008| Section 3. APPLICABILITY.--The provisions of this act | 0009| are applicable to taxable years beginning on or after January | 0010| 1, 1998. | 0011| |