Who is eligible for the New Mexico Child Day Care Credit?
If you paid child day care expenses for your dependents during 2020, and you weren't reimbursed for these amounts, you may qualify for the New Mexico Child Day Care Credit.
To qualify for the credit, all of the following must be true:
- You were not eligible to be claimed as a dependent of another taxpayer for the tax year.
- You were not an inmate of a public institution for more than six months of the tax year.
- You have a modified gross income of $30,160 or less.
- You were a resident of New Mexico during any part of the tax year.
- You provided over half the cost of maintaining a household for one or more qualifying dependents for the part of the tax year for which you are claiming the credit (either separately or jointly with a spouse).
- You were gainfully employed for the part of the tax year for which you are claiming the credit.
- You were not a recipient of public assistance under TANF, the New Mexico Works Act, or a similar program during the part of the tax year for which you are claiming the credit.
- You have not been reimbursed or compensated for the amount of child day care expense for which you are claiming the credit.
Reimbursed or compensated child day care expenses, like those paid with pre-tax dollars under a cafeteria and similar benefit plans, are also ineligible.
The New Mexico Taxation and Revenue Department checks with appropriate state agencies to verify if you are receiving public assistance.
You cannot claim a credit for amounts paid to a caregiver unless all of the following are true for the caregiver:
- If an individual, the caregiver was at least 18 years old when providing the care.
- The caregiver provided the day care service in New Mexico.
- The caregiver provided day care for less than 24 hours daily.
- You or your spouse could not claim the caregiver as a dependent for federal income tax purposes.
If spouses file a joint return, both must have been gainfully employed unless one was disabled for the part of the tax year for which you are claiming the credit. Couples who maintain a household for one or more qualifying dependents, but file separate returns for a tax year, may each claim only half the credit allowed for a joint return.
For more information on this credit, see the PIT-RC Instructions