Bill would let eligible foster parents and guardians claim a refundable tax credit

The bill would let eligible caregivers claim a refundable state income tax credit. A qualifying caregiver must be a foster parent licensed or certified to care for a child in state or agency custody, or a guardian appointed by a court or tribal authority under the Kinship Guardianship Act. The child must be under 18; a guardian ad litem does not qualify. The taxpayer must be a New Mexico resident and cannot be someone else's dependent. A household may receive one certified credit per tax year, except spouses filing separate returns may each claim half of the joint-return amount. The credit would apply to tax years beginning on or after January 1, 2026.

Caregivers would apply to the Children, Youth and Families Department for a certificate stating the eligible amount and tax years when the credit may be claimed. The process applies to taxpayers seeking this foster parent and guardian tax credit. The department would decide whether the caregiver qualifies. The caregiver would claim the credit as directed by the tax department. A caregiver would have one tax year after the certification year to claim the credit.