Analysis

Synopsis:

 Senate Bill 339 (SB 339) amends taxation code to increase the low-income comprehensive tax rebate. SB 339 also increases the amount of the working families tax credit and expands eligibility requirements for the credit. SB339 requires withholders of the tax to provide withholds information regarding state assistance for low-income New Mexican from the Taxation and Revenue Department.  

Analysis:

 Senate Bill 339 (SB 339) amends taxation code to increase the low-income comprehensive tax rebate. SB 339 also increases the amount of the working families tax credit and expands eligibility requirements for the credit. SB339 requires withholders of the tax to provide withholds information regarding state assistance for low-income New Mexican from the Taxation and Revenue Department.  

SECTION 1. Amends Taxation Section 7-2-14 NMSA 1978 (being Laws 1972, Chapter 20, Section 2, as amended) LOW-INCOME COMPREHENSIVE TAX REBATE to increase the loc-income comprehensive tax rebate. Changes follow:
Subsection A is amended from husband and wife to married individuals for gender neutrality.
Subsection D deletes and then inserts a new table with numbers for the low-income tax rebate. It expands the eligibility for the credit to $36,0000.
D. The tax rebate provided for in this section may be claimed in the amount shown in the following table:
Deletes gross income from $0 to $22,000. Deletes the Total Exemptions from 1-6 for the same incomes.Inserts gross income from $0 to $36,000. Inserts the Total Exemptions from 1-6 for the same incomes, which start at a larger exemption and decrease as the income increases across 1-6 exemptions.
Inserts Subsection G and H as follows:
G. The rebate provided by this section may be referred to as the "low-income comprehensive tax rebate". 
H. The department shall compile an annual report on the rebate provided by this section that shall include the number of taxpayers approved by the department to receive the rebate, the aggregate amount of rebates approved and any other information necessary to evaluate the rebate. The department shall present the report to the revenue stabilization and tax policy committee, the legislative finance committee and the legislative health and human services committee with an analysis of the cost of the rebate. Then reletters section.

SECTION 2. Amends Section 7-2-18.15 NMSA 1978 (being Laws 2007, Chapter 45, Section 9, as amended) WORKING FAMILIES TAX CREDIT to increase the individual New Mexico income tax credit. Subsection A is revised to read:
A. A taxpayer who is a resident and who files an individual New Mexico income tax return may claim a credit in an amount equal to 25 percent of the federal earned income tax credit for which that individual is eligible for the same taxable year or would have been eligible but for the identification number requirement pursuant to 26 U.S.C. 32(m), as that section may be amended or renumbered.
Subsection B and E are inserted as follows:
B. A taxpayer who is a resident and who files an individual New Mexico tax return may claim a credit in an amount equal to 25 percent of the federal earned income tax credit for which that taxpayer would have been eligible for the same taxable year but for the age requirement pursuant to 26 U.S.C. 32(c)(1)(A)(II), as that section may be amended or renumbered; provided that the taxpayer is at least 18 years of age but has not reached the age of 25. Then reletters the section.
E. As used in this section, "federal earned income tax credit" means the tax credit allowed pursuant to 26 U.S.C. 32, as that section may be amended or renumbered." 

SECTION 3. Amends Section 7-3-8 NMSA 1978 (being Laws 1961, Chapter 243, Section 9, as amended) to change the title to read:  ANNUAL STATEMENT OF WITHHOLDING AND INFORMATION REGARDING STATE ASSISTANCE FOR LOW-INCOME NEW MEXICANS TO BE  PROVIDED TO WITHHOLDEES to provides the following information as inserted:
On or before January 31 of the year following that for which the annual statement of withholding is made pursuant to Section 7-3-7 NMSA 1978, a withholder shall provide to a withholdee: 
A. a copy of the annual statement of withholding; and
B. information regarding state assistance for low-income New Mexicans, including information as specified. The information shall be provided in English and in Spanish on a form and in a manner required by the department, and the department shall make the information available on the department's website.

SECTION 4. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2021.

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