18-02-2025
Major tax breaks for low-income families in New Mexico could be coming soon
NEW MEXICO (KRQE) – Low-income families in the state could see a huge tax break next year. New Mexico legislators are considering a bill that would eliminate the state income tax for those making less than $55,000 a year. The bill is part of an effort to support New Mexicans while the cost of living rises.'There'll be now about a little over 300,000 workers in New Mexico that will have their state personal income tax liability completely extinguished,' said Rep. Derrick Lente (D-Sandia Pueblo).
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Should the Earned Income Tax Credit Bill pass, it would increase refundable credits and expand who is eligible for tax breaks, specifically for New Mexicans making minimum wage up to $25 per hour.
Rep. Lente, Chair of the House Taxation and Revenue Committee, said this bill could create a meaningful impact during a time when the cost of living is rising. 'We are doing this in a way that's responsible, it's not breaking the bank, and I think that if times ever turn financially for New Mexico, this would be one of those things that would not have to be cut,' said Rep. Lente.
The proposed tax credit will instead be paid by the state. The cost is currently estimated to be around $70 million annually.
After the bill was presented, there was deliberation on possibly expanding the bill to include middle-wage earners in the state. But Rep. Lente said it's a balancing act. 'I think it's a matter of how much do we want to expand it before it gets too expensive to want to be able to implement it year after year and feel comfortable with it?' said Rep. Lente.
While legislators and the public expressed support for the bill it's still undergoing changes. But the bill could be added to a larger tax package later. 'A common practice in our committee is that anything that has a fiscal impact to the general fund will have to be tabled and retained in our committee for the potential inclusion into a larger tax omnibus bill,' said Rep. Lente.
The tax package is set to be assembled near the end of this legislative session.
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