SANTA FE – In an effort to put tax refunds in the pockets of New Mexicans who need it most, the Taxation and Revenue Department is reaching out by mail to taxpayers who may have qualified for the state’s Working Families Tax Credit in past years but did not claim it.
Letters from the Lujan Grisham administration have begun to be sent this week to taxpayers who claimed the federal Earned Income Tax Credit but not the state’s Working Families Tax Credit, or who claimed neither but, based on their reported earned income and filing status, may have qualified for both.
The letters will be sent to more than 14,000 taxpayers with more than $4 million in potential credits for working New Mexico families in the balance.
“Our Taxation and Revenue Department is taking a proactive approach to ensure New Mexico families receive the tax breaks they have earned,” Gov. Michelle Lujan Grisham said. “The Working Families Tax Credit can make an enormous difference for families in our state – and we will do everything we can to reach those families.”
The Working Families Tax Credit is a percentage of the Earned Income Tax Credit. It provides a refundable credit to individuals and working families based on earned income and family size. In past years, the state credit was worth 10 percent of the EITC. Under a bill passed by the New Mexico Legislature and signed into law by Governor Michelle Lujan Grisham last year, as of the 2019 tax year, the state credit is worth 17 percent of the EITC.
New Mexican taxpayers who qualify for the EITC also qualify for the Working Families Tax Credit. The two credits combined can be worth anywhere from a few dollars to more than $7,000. The credits are larger for families with more dependents and phase out gradually as income rises. Eligible taxpayers may receive a refund even if the credit exceeds their tax liability.
The taxpayers being notified this week can file an amended return for the years in question – 2016 to 2018 – to claim the EITC and the Working Families Credit, as applicable.
TRD also urges New Mexicans who think they may qualify for the credit for 2019 to be sure to consider it when filling out their 2019 tax returns. More than 200,000 taxpayers may be eligible.
For the 2019 tax year, adjusted gross income can range as high as $55,952 for a married couple filing jointly with three or more children. To qualify, the taxpayer must have a job or be self-employed and must be a U.S. citizen or legal resident for the entire tax year. More information eligibility is available at IRS.gov.
“This credit is designed for New Mexico taxpayers who need it most – people who are working hard and still struggling to make ends meet. For some, this credit can make the difference in being able to afford basic necessities like food and housing for their families,” said Taxation and Revenue Secretary Stephanie Schardin Clarke.
Friday, Jan, 31, 2020, is Earned Income Tax Credit Awareness Day.