Although the monthly child tax credit initiated by the Biden administration to assist families with child-rearing expenses has concluded, several states have taken the initiative to launch their versions of the child tax credit. In New Mexico, a nonrefundable credit of up to $683 per child has been introduced, with plans for it to be available until 2032.
Governor Michelle Lujan Grisham (D-NM) recently signed legislation enhancing the child tax credit for families in the three lowest income brackets. Starting with the 2023 tax year, families in these brackets will receive increased credits of $600, $400, and $200, which is a significant rise from the previous amounts of $175, $150, and $125.
Landscape of Enhanced Child Tax Credits Across States
Governor Lujan Grisham, in an April press statement, emphasized the impact of this expansion. “By broadening the Child Tax Credit, we’re supporting over 200,000 families in New Mexico and continuing our effective campaign to lower child poverty rates, which saw a decline of one percent from 2019 to 2021,” she stated. “Reducing the gross receipts tax for healthcare practitioners not only reduces patient costs but also retains more medical professionals in our state. Moreover, enhancing support for the film and television industry will attract more private investment to New Mexico and create additional employment opportunities for our residents.”
During 2021, the Biden administration augmented the monthly Child Tax Credit (CTC) payments, raising the maximum credit from $2,000 to $3,600 for children under six and up to $3,000 for children between six and seventeen years of age. However, this expanded federal child tax credit ceased in 2022. Following this, New Mexico and several other states have either introduced or updated their state child tax credits.
Currently, five states – Oregon, Colorado, Minnesota, New Jersey, and Vermont – are providing new or enhanced tax credits. These states offer refundable credits amounting to $1,000 or more for each eligible child. Altogether, fourteen states across the U.S. are providing some form of child tax credits to support families.