FOSTER PARENT TAX CREDIT

SB0088

SENATE BILL 88

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Michael Padilla

AN ACT

RELATING TO TAXATION; CREATING THE FOSTER PARENT AND GUARDIAN
INCOME TAX CREDIT.

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--FOSTER PARENT AND GUARDIAN INCOME
TAX CREDIT.--

A. A taxpayer who is a resident, who is not a
dependent of another individual and who is a foster parent or a
guardian of a child may claim a credit against the taxpayer's
tax liability imposed pursuant to the Income Tax Act. The
credit authorized pursuant to this section may be referred to
as the "foster parent and guardian income tax credit".

B. The amount of the tax credit shall be in an
amount equal to five hundred dollars ($500) for each month the
taxpayer is a foster parent or guardian of a child in the
taxable year in which the tax credit is claimed; provided that
the taxpayer shall be a foster parent or guardian for more than
fifty percent of that month; and provided further that the
maximum amount of credit that may be claimed by a taxpayer in a
taxable year is six thousand dollars ($6,000).

C. A taxpayer shall apply for certification of
eligibility for the tax credit from the children, youth and
families department on forms and in the manner prescribed by
that department. Except as provided in Subsection E of this
section, only one tax credit shall be certified for all
taxpayers in a household per taxable year. If the children,
youth and families department determines that the taxpayer
meets the requirements of this section, that department shall
issue a dated certificate of eligibility to the taxpayer
providing the amount of tax credit for which the taxpayer is
eligible and the taxable years in which the credit may be
claimed. The children, youth and families department shall
provide the taxation and revenue department with the
certificates of eligibility issued pursuant to this subsection
in an electronic format at regularly agreed upon intervals.

D. That portion of the tax credit that exceeds a
taxpayer's income tax liability in the taxable year in which
the credit is claimed shall be refunded to the taxpayer.

E. Married individuals filing separate returns for
a taxable year for which they could have filed a joint return
may each claim only one-half of the tax credit that would have
been claimed on a joint return.

F. A taxpayer allowed to claim a tax credit
pursuant to this section shall claim the tax credit in a manner
required by the department. The credit shall be claimed within
one taxable year of the end of the year in which the children,
youth and families department certifies the credit.

G. The credit provided by this section shall be
included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the total annual aggregate cost of
the credit.

H. As used in this section:

(1) "child" means an unemancipated individual
who has not reached eighteen years of age;

(2) "foster parent" means a person licensed or
certified by the children, youth and families department or a
child placement agency to provide care for children in the
custody of that department or agency; and

(3) "guardian" means a person appointed as a
guardian by a court or an Indian tribal authority pursuant to
the Kinship Guardianship Act, but does not include a person
appointed as a guardian ad litem."

SECTION 2.
APPLICABILITY.--The provisions of this act
apply to taxable years beginning on or after January 1, 2026.

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