44TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 1999

RELATING TO TAXATION; ENACTING A NEW SECTION OF THE INCOME TAX ACT TO PROVIDE A CREDIT FOR FAMILIES CARING FOR CHILDREN AT HOME.

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] CREDIT FOR CHILD CARE AT HOME.--

A. Any resident who files an individual New Mexico income tax return and who is not a dependent of another taxpayer may claim a credit of three hundred fifty dollars ($350) for caring for one or more dependents at home during the taxable year if:

(1) the resident or, if a joint return is filed, one spouse, is not gainfully employed for any period of the taxable year for which the credit is claimed; and

(2) the resident or, if a joint return is filed, the spouse that is not gainfully employed, cares full time for one or more qualifying dependents in the home for all of the taxable year.

B. The credit provided in this section may only be deducted from the taxpayer's New Mexico income tax liability for the taxable year.

C. A husband and wife maintaining a household for one or more qualifying dependents and filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the credit that would have been claimed on a joint return.

D. As used in this section:

(1) "dependent" means "dependent" as defined by Section 152 of the Internal Revenue Code of 1986, as that section may be amended or renumbered;

(2) "gainfully employed" means working for remuneration for others, either full time or part time, or self-employment in a business, partnership or other legal entity; and

(3) "qualifying dependent" means a dependent who is twelve years of age or younger at the end of the taxable year."

Section 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 1998.