The Child Day Care Credit may not exceed $1,200. ($600 for a married taxpayer filing a separate return.)

A credit claimant must:

• have a Modified Gross Income of $21,424 or less
• be a resident of New Mexico during the tax year
• furnish over half the cost of maintaining a household for one or more qualifying dependents for that part of the tax year for which the rebate is claimed (either separately or jointly with a spouse)
• be gainfully employed for that part of the tax year for which the credit is claimed. If they file a joint return, both spouses must have been gainfully employed unless one was disabled for that part of the tax year for which the credit is claimed
• not be a recipient of public assistance under a program of temporary assistance for needy families or a similar program during that part of the tax year for which the credit is claimed.

No credit can be claimed for amounts paid to a caregiver unless the caregiver:

• was at least 18 years old at the time care was provided
• provided the day care service within New Mexico
• provided day care for fewer than 24 hours daily, and
• could not be claimed as a dependent by you or your spouse for federal income tax purposes

A husband and wife maintaining a household for one or more qualifying dependents but filing separate returns for a tax year may each claim only half the credit allowed for a joint return.

EXAMPLE: The taxpayer is a a single parent who provides over 50% of the support of a dependent child. The taxpayer attended school from January through May and became gainfully employed on a full-time basis on June 1. The taxpayer had child care expenses for the entire year from a caregiver located in New Mexico. The taxpayer can claim the credit for child care only for expenses from June through December while the taxpayer was employed. The taxpayer may not count expenses for child care from January through May.

Each caregiver is required to give you a Form PIT-CG, Caregivers Statement.

How To Calculate Expenses For More Than One Child

EXAMPLE: The taxpayers three children each received 200 days of care. The fee was $10 daily for each child. The taxpayers available New Mexico day care credit amount is $1,200.

The number of days of care (200) X $8 (even though the actual amount paid out was $10). The maximum daily amount for computing the credit is $8. 200 times $8 equals $1,600

How To Calculate Expenses For More Than One Rate Paid For Child Care

EXAMPLE:The taxpayers child received 100 days of care at $7 per day and 50 more days at $10 per day. The taxpayers available day care expenses are: 100 (days of care) X $7 (amount paid per day). 100 times $7 equals $700. 50 (days of care) X $8 (maximum daily amount for this credit although the taxpayer actually paid $10 per day) equals $400. Total Expenses would be $1100.

OnLine Taxes will compute the credit for you. The qualified expenses are multiplied by 40%. The maximum allowable credit is $1200. And the maximum allowable expenses are $480.

Back