History: Laws 2004, ch. 99, § 1; repealed by Laws 2005, ch. 91, § 2.
A. As used in this section:
(1) "caregiver" means a corporation or an individual eighteen years of age or over who receives compensation from a resident for providing direct care, supervision and guidance to a qualifying dependent of the resident for less than twenty-four hours daily and includes related individuals of the resident but does not include a dependent of the resident;
(2) "cost of maintaining a household" means the expenses incurred for the mutual benefit of the occupants thereof by reason of its operation as the principal place of abode of such occupants, including property taxes, mortgage interest, rent, utility charges, upkeep and repairs, property insurance and food consumed on the premises. "Cost of maintaining a household" shall not include expenses otherwise incurred, including cost of clothing, education, medical treatment, vacations, life insurance, transportation and mortgages;
(3) "dependent" means "dependent" as defined by Section 152 of the Internal Revenue Code, as that section may be amended or renumbered, but also includes any minor child or stepchild of the resident 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 resident;
(4) "disabled person" means a person who has a medically determinable physical or mental impairment, as certified by a licensed physician or an advanced practice registered nurse, certified nurse-midwife or physician assistant working within that person's scope of practice, that renders such person unable to engage in gainful employment;
(5) "gainfully employed" means working for remuneration for others, either full time or part time, or self-employment in a business or partnership; and
(6) "qualifying dependent" means a dependent under the age of fifteen at the end of the taxable year who receives the services of a caregiver.
B. Any resident who files an individual New Mexico income tax return and who is not a dependent of another taxpayer may claim a credit for child day care expenses incurred and paid to a caregiver in New Mexico during the taxable year by such resident if the resident:
(1) singly or together with a spouse furnishes over half the cost of maintaining the household for one or more qualifying dependents for any period in the taxable year for which the credit is claimed;
(2) is gainfully employed for any period for which the credit is claimed or, if a joint return is filed, both spouses are gainfully employed or one is disabled for any period for which the credit is claimed;
(3) compensates a caregiver for child day care for a qualifying dependent to enable such resident together with the resident's spouse, if any and if not disabled, to be gainfully employed;
(4) is not a recipient of public assistance under a program of aid to families with dependent children, a program under the New Mexico Works Act [Chapter 27, Article 2B NMSA 1978] or any successor program during any period for which the credit provided by this section is claimed; and
(5) has a modified gross income, including child support payments, if any, of not more than the annual income that would be derived from earnings at double the federal minimum wage.
C. The credit provided for in this section shall be forty percent of the actual compensation paid to a caregiver by the resident for a qualifying dependent not to exceed four hundred eighty dollars ($480) for each qualifying dependent or a total of one thousand two hundred dollars ($1,200) for all qualifying dependents for a taxable year. For the purposes of computing the credit, actual compensation shall not exceed eight dollars ($8.00) per day for each qualifying dependent.
D. The caregiver shall furnish the resident with a signed statement of compensation paid by the resident to the caregiver for day care services. Such statements shall specify the dates and the total number of days for which payment has been made.
E. If the resident taxpayer has a federal tax liability, the taxpayer shall claim from the state not more than the difference between the amount of the state child care credit for which the taxpayer is eligible and the federal credit for child and dependent care expenses the taxpayer is able to deduct from federal tax liability for the same taxable year; provided, for first year residents only, the amount of the federal credit for child and dependent care expenses may be reduced to an amount equal to the amount of federal credit for child and dependent care expenses the resident is able to deduct from federal tax liability multiplied by the ratio of the number of days of residence in New Mexico during the resident's taxable year to the total number of days in the resident's taxable year.
F. The credit provided for 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.
G. 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:
(1) may each claim only one-half of the credit that would have been claimed on a joint return; and
(2) are eligible for the credit provided in this section only if their joint modified gross income, including child support payments, if any, is not more than the annual income that would be derived from earnings at double the federal minimum wage.
History: Laws 1981, ch. 170, § 1; 1990, ch. 49, § 10; 1995, ch. 11, § 4; 1999, ch. 47, § 4; 2015, ch. 116, § 1.
ANNOTATIONSCross references. — For Section 152 of the Internal Revenue Code, see 26 U.S.C. § 152.
The 2015 amendment, effective June 19, 2015, amended the definition of "disabled person" in the Income Tax Act to allow certain health care professions other than licensed physicians who may determine physical or mental impairment; in Paragraph (1) of Subsection A, after "compensation from", deleted "the" and added "a"; in Paragraph (4) of Subsection A, after "certified by a licensed physician", added "or an advanced practice registered nurse, certified nurse-midwife or physician assistant working within that person's scope of practice"; and in Paragraph (3) of Subsection B, after "together with", deleted "his" and added "the resident's".
Temporary provisions. — Laws 2015, ch. 116, § 16 provided that by January 1, 2016, every cabinet secretary, agency head and head of a political subdivision of the state shall update rules requiring an examination by, a certificate from or a statement of a licensed physician to also accept such examination, certificate or statement from an advanced practice registered nurse, certified nurse-midwife or physician assistant working within that person's scope of practice.
The 1999 amendment, effective June 18, 1999, inserted "a program under the New Mexico Works Act or any successor program" in Paragraph B(4).
The 1995 amendment, effective June 16, 1995, in Subsection E, substituted "federal credit for filed and dependent care expenses" for "federal child care credit", added the proviso at the end, and made stylistic changes.
The 1990 amendment, effective May 16, 1990, in Subsection A, substituted "dependent of the resident" for "dependent for whom the resident or his spouse would be eligible for an exemption for federal income tax purposes" at the end of Paragraph (1), added Paragraph (3), and redesignated former Paragraphs (3) to (5) as Paragraphs (4) to (6).