HB14 makes several tax policy changes. Its central feature is the repeal of New Mexico’s Working Families Tax Credit and replacement with a new state Earned Income Tax Credit (EITC) tied to the federal credit, with refundable benefits, income thresholds, phaseouts, inflation adjustments beginning in 2026, and special eligibility rules that extend to some taxpayers who would otherwise miss the federal credit because of identification-number or age requirements. The bill also creates a separate refundable income tax credit for foster parents and guardians, available through 2030, to provide up to $3,000 per year based on months of qualifying care.
The bill also modifies gross receipts tax law by expanding a deduction for health care practitioners to include coinsurance, copayments, and deductibles paid by patients under commercial health plans, effective July 1, 2026. In addition, it increases liquor excise tax rates, changes the distribution of liquor excise tax revenue, and creates a new Tribal Alcohol Harms Alleviation Fund to support alcohol prevention, treatment, recovery, and related grants for Indian nations, tribes, and pueblos. The liquor tax and fund provisions take effect July 1, 2025, while the income tax provisions apply to taxable years beginning on or after January 1, 2026.
HB14 amends multiple sections of the New Mexico Statutes Annotated, including the Income Tax Act, Gross Receipts and Compensating Tax Act, and liquor excise tax provisions. It replaces the existing working families credit with a new refundable earned income tax credit, adds a new refundable foster parent and guardian credit, broadens a health care gross receipts deduction, raises liquor excise tax rates, and redirects a portion of liquor tax revenue to a new tribal alcohol harms alleviation fund. The bill affects low- and moderate-income taxpayers, foster caregivers, health care practitioners, alcohol wholesalers and retailers, and tribal governments and service providers.
The voting history suggests the bill had broad but not unanimous support. It passed the House 39-27 and the Senate 36-1, indicating strong overall approval in the Senate and a more divided House. The available record does not include committee debate, but the final votes suggest the bill was generally viewed favorably as a package of tax relief, targeted credits, and public health funding, while still drawing some opposition, likely from members concerned about tax increases or the scope of the changes.
The most likely points of contention are the liquor excise tax increases and the repeal of the existing Working Families Tax Credit in favor of a redesigned EITC. Opponents may have objected to higher alcohol taxes, the fiscal cost of refundable credits, or the policy shift away from the prior credit structure. Supporters likely emphasized the bill’s benefits for working families, foster parents and guardians, health care access, and tribal alcohol harm reduction funding. The House vote margin shows the package was more controversial there than in the Senate.