New Mexico adopts its own child tax credit

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The expanded child tax credit may have expired late last year, but with a possible extension of the credit highly uncertain, some states have been considering their own new child tax credits. This includes Alabama, Vermont, Michigan and other states, which have either passed a new child tax credit or advanced it to some degree in their legislatures.

The latest state to follow is New Mexico, with Governor Michelle Lujan Grisham signing legislation this week that includes a refundable child tax credit and other benefits for citizens. According to a fact sheet distributed by the governor’s office, Bill 163 creates a new refundable child tax credit of up to $175 per child and eliminates Social Security income tax. Other provisions include a one-time income tax refund, a three-year income tax holiday for armed forces retirees and a $1,000 refundable tax credit for full-time hospital nurses. .

The Albuquerque Journal reported last month that an initial proposal had the child tax credit as high as $350 per child. The same newspaper reported this week that families in New Mexico are struggling not to qualify for the monthly federal child tax credit.

“New Mexicans, like all Americans, are feeling the pressure of rising costs,” Gov. Lujan Grisham said. “Coupled with the state’s current strong fiscal position, there’s no reason we shouldn’t take all the necessary steps to reduce costs for New Mexico seniors, families and businesses — and today, that is exactly what we are doing.

Legislative leaders have praised the child tax credit provision in particular. “New Mexico is leading the way with innovative tax policies that support our working families,” House Majority Leader Javier Martínez said in the governor’s statement. “Our Child Income Tax Credit will help struggling families make ends meet in every community across the state.”

The White House this week released a state-by-state analysis of the tax breaks that had been doled out from the American Rescue Plan Act, which was passed about a year ago. In New Mexico, 420,000 children received the Child Tax Credit, while 134,000 workers benefited from the expanded earned income tax credit.

As for the federal child tax credit, could it make a comeback?

A report this week said Sen. Sherrod Brown (D-OH) and Sen. Mitt Romney (R-UT) are engaged in bipartisan talks to bring back the credit in some form. Brown had lobbied for the child tax credit for several years before it was enacted, while Romney was proposing his own “child benefit” in 2021.

Stephen Silver, technology editor for The National Interest, is a journalist, essayist and film critic, who also contributes to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and connect today. Co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Picture: Reuters.


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