SB 231 — FOSTER YOUTH EMPLOYMENT TAX CREDITS

SENATEAN BILLACT 231RELATING 53RDTO LEGISLATURETAXATION; - STATEOFNEWMEXICO- SECOND SESSION , 2018 INTRODUCED BY George K.

Munoz 6 8 10 AN ACT RELATING TO TAXATION;

146 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

A new section of the Income Tax Act is enacted e t 17 to read:

w"FOSTER l n d 18 "[NEW MATERIAL] FOSTER YOUTH EMPLOYMENT INCOME TAX = = 19 CREDIT.-- a l i a e r 20 A.

A taxpayer who is not a dependent of another a t m m 21 individual and who employs a qualified foster youth in New d r e 22 Mexico is eligible for a credit against the taxpayer's tax c e s k 23 liability imposed pursuant to the Income Tax Act in an amount e a n b 24 up to one thousand dollars ($1,000) of the gross wages paid to u [ each qualified foster youth by the taxpayer during the taxable .209948.2 year for which the return is filed.

The purpose of the foster youth employment income tax credit is to encourage the employment of SB 231 individuals who as youth were adjudicated as abused or Page 1 neglected or who were in the legal custody of the children, youth and families department under the Children's Code or in the legal custody of a New Mexico Indian nation, tribe or pueblo or the United States department of the interior bureau of Indian affairs division of human services.

A taxpayer may claim the foster youth employment e e 17 income tax credit provided in this section for each taxable e e n d 18 year in which the taxpayer employs one or more qualified foster = = l ] 19 youths;

provided that the taxpayer may not claim the foster a l r i 20 youth employment income tax credit for any individual qualified t e a t foster youth for more than one calendar year from the date of m m 21 e d r e 22 hire.

c e r c 23 D.

That portion of a foster youth employment income e a n b 24 tax credit approved by the department that exceeds a taxpayer's u [ income tax liability in the taxable year in which the foster .209948.2 - 2 - youth employment income tax credit is claimed shall not be refunded to the taxpayer but may be carried forward for up to three years.

SB 231 Page 2 F.

The total credit claimed by all members of the e e 17 partnership or limited liability company shall not exceed the e e n d 18 allowable credit pursuant to Subsection A of this section.

= = l ] 19 G.

The taxpayer shall submit to the department with a l r i 20 respect to each employee for whom the foster youth employment t e a t income tax credit is claimed information required by the m m 21 e d r e 22 department with respect to the qualified foster youth's c e r c 23 employment by the taxpayer during the taxable year for which e a n b 24 the foster youth employment income tax credit is claimed, u [ including information establishing that the employee is a .209948.2 - 3 - qualified foster youth that can be used to determine that the employee was not also employed in the same taxable year by another taxpayer claiming a foster youth employment income or corporate income tax credit for that employee pursuant to this section or the Corporate Income and Franchise Tax Act.

(1) adopt rules establishing procedures to SB 231 Page 3 certify that an employee is a qualified foster youth for purposes of obtaining a foster youth employment income tax credit.

and (2) collaborate with the children, youth and families department, the New Mexico Indian nations, tribes and e e 17 pueblos and the United States department of the interior bureau e e n d 18 of Indian affairs division of human services to establish the = = l ] 19 certification procedures.

a l r i 20 I.

A taxpayer allowed a tax credit pursuant to this t e a t section shall report the amount of the credit to the department m m 21 e d r e 22 in a manner required by the department.

c e r c 23 J.

The department shall compile an annual report on e a n b 24 the foster youth employment income tax credit that shall u [ include the number of taxpayers approved by the department to .209948.2 - 4 - receive the credit, the aggregate amount of credits approved and any other information necessary to evaluate the effectiveness of the credit.

The department shall present the annual report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the tax credit and whether the tax credit is performing the purpose for which it SB 231 Page 4 was created.

e e 17 or e e n d 18 (b) within the seven years prior to the = = l ] 19 taxable year for which the tax credit is claimed, was aged a l r i 20 fourteen years or older and was in the legal custody of the t e a t children, youth and families department pursuant to the m m 21 e d r e 22 Children's Code or in the legal custody of a New Mexico Indian c e r c 23 nation, tribe or pueblo or the United States department of the e a n b 24 interior bureau of Indian affairs division of human services;

u [ (2) who works at least twenty hours per week .209948.2 - 5 - during the taxable year for which the foster youth employment income tax credit is claimed;

A new section of the Corporate Income and SB 231 Page 5 Franchise Tax Act is enacted to read:

"[NEW"FOSTER MATERIAL] FOSTER YOUTH EMPLOYMENT CORPORATE INCOME TAX CREDIT.-- A.

A taxpayer that employs a qualified foster youth for e e 17 less than the full taxable year is eligible for a credit amount e e n d 18 equal to one thousand dollars ($1,000) multiplied by the = = l ] 19 fraction of a full year for which the qualified foster youth a l r i 20 was employed.

The tax credit provided by this section may be t e a t referred to as the "foster youth employment corporate income m m 21 e d r e 22 tax credit".

c e r c 23 B.

The purpose of the foster youth employment e a n b 24 corporate income tax credit is to encourage the employment of u [ individuals who as youth were adjudicated as abused or .209948.2 - 6 - neglected or who were in the legal custody of the children, youth and families department under the Children's Code or in the legal custody of a New Mexico Indian nation, tribe or pueblo or the United States department of the interior bureau of Indian affairs division of human services.

A taxpayer may claim the foster youth employment corporate income tax credit provided in this SB 231 Page 6 section for each taxable year in which the taxpayer employs one or more qualified foster youths;

That portion of a foster youth employment corporate income tax credit approved by the department that exceeds a taxpayer's corporate income tax liability in the taxable year in which the foster youth employment corporate e e 17 income tax credit is claimed shall not be refunded to the e e n d 18 taxpayer but may be carried forward for up to three years.

The = = l ] 19 foster youth employment corporate income tax credit shall not a l r i 20 be transferred to another taxpayer.

t e a t E.

The taxpayer shall submit to the department with m m 21 e d r e 22 respect to each employee for whom the foster youth employment c e r c 23 corporate income tax credit is claimed information required by e a n b 24 the department with respect to the qualified foster youth's u [ employment by the taxpayer during the taxable year for which .209948.2 - 7 - the foster youth employment corporate income tax credit is claimed, including information establishing that the employee is a qualified foster youth that can be used to determine that the employee was not also employed in the same taxable year by another taxpayer claiming a foster youth employment income or corporate income tax credit for that employee pursuant to this section or the Income Tax Act.

SB 231 Page 7 F.

and e e 17 (2) collaborate with the children, youth and e e n d 18 families department, the New Mexico Indian nations, tribes and = = l ] 19 pueblos and the United States department of the interior bureau a l r i 20 of Indian affairs division of human services to establish the t e a t certification procedures.

m m 21 e d r e 22 G.

A taxpayer allowed a tax credit pursuant to this c e r c 23 section shall report the amount of the credit to the department e a n b 24 in a manner required by the department.

u [ H.