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Committee advances bill to expand New Mexico earned-income tax credit
Summary
A legislative committee voted unanimously to advance House Bill 14, which would replace and expand the state's Working Families Tax Credit by decoupling from the federal EITC, raising the state match and extending eligibility to more single filers and childless workers.
House lawmakers on the Commerce & Economic Development committee on the afternoon the bill was heard voted 10-0 to give House Bill 14 a favorable recommendation to the full House. The bill would replace New Mexico’s Working Families Tax Credit with a state Earned Income Tax Credit (EITC), increase the state match to the federal credit, and expand eligibility to childless and single filers.
Supporters said the measure aims to reduce poverty and boost workforce participation. "House Bill 14 replaces and expands the current New Mexico Working Families Tax Credit with what is now considered the New Mexico Earned Income Tax Credit," Chairman Lenta told the committee, describing the change as modeled on the federal EITC and intended to "bring people into the workforce, reduce poverty, and improve outcomes for children."
A nut graf: The bill would raise the state match of the federal earned-income tax credit from the current 25% to 30%, extend eligibility thresholds so roughly 101,000 more New Mexicans would qualify, and decouple the state program from the federal EITC so New Mexico can set tailored rules for state benefits. Proponents said those changes both increase the size of the credit and smooth the phaseout so benefits do not drop sharply when recipients get raises.
Under the sponsors' examples, a single parent with one child working full time at minimum wage currently receives about $700 from the state credit; under HB14 that same household would receive about $1,100, effectively eliminating state income tax liability for that filer. Committee testimony cited broad take-up of the existing program—about 195,000 working New Mexicans receive the current credit, with an average state benefit of roughly $500 per year.
Paige Knight, deputy policy director with New Mexico Voices for Children, testified remotely in support, saying the bill "allows for a more generous credit amount and by extending the credit and, therefore, its benefits to more hardworking New Mexicans," and urged a due pass. The sponsor and advocates said the bill is intended to reduce "cliff effects" that can discourage income increases under some benefit structures.
The committee took public testimony, heard questions from members and then voted. Committee members recorded a unanimous committee vote: final tally 10 yes, 0 no. The committee forwarded HB14 with a recommendation to pass.
The bill’s next steps are consideration by the full House. No effective date or fiscal detail beyond examples in testimony was specified during the committee hearing.
