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Thu March 6, 2014
Voices For Children: President Obama's Tax Credit Proposal Would Help 200,000 New Mexico Kids
Almost 215,000 New Mexico children have benefitted every year from improvements made in 2009 to the federal Earned Income Tax Credit and the Child Tax Credit, according to a factsheet released by the Center on Budget and Policy Priorities. Unless Congress makes those changes permanent, they will expire in 2017 and 8,600 children will likely be thrust back into poverty.
Making the 2009 changes permanent is one of the proposals in President Obama’s 2015 budget, which was released this week. The President also calls for Congress to expand the Earned Income Tax Credit (EITC) so that it benefits more childless workers. That plan would make 93,000 New Mexico workers newly eligible for the credit or eligible for a larger credit in 2015.
New Mexico is one of 25 states that offers a state-level tax credit that supplements the EITC. The New Mexico Working Families Tax Credit (WFTC) is worth 10 percent of the federal EITC, so any expansion of the EITC will raise the value of the WFTC as well.
“These tax credits for low-income working families are an excellent poverty-fighting tool and New Mexico is wise to have a state-level credit,” said James Jimenez, Director of Policy, Research, and Advocacy Integration at New Mexico Voices for Children. “Legislation that would have increased the value of the Working Families Tax Credit was considered during the 2014 session, but unfortunately was not passed.”
Raising the EITC credit for childless workers would increase the credit for someone working full time at the minimum wage from its current $22 to $542. Childless workers with earnings at the poverty level would see their EITC increased from $171 to $841.
The CBPP factsheet is available online at http://apps.cbpp.org/3-5-14tax/?state=NM