Summary:

 House Bill 177 (HB 177) creates an income tax credit for parents of home-schooled children to offset curriculum material costs. The credit is capped at $2,500 per child and is refundable. The bill applies to taxable years beginning on or after January 1, 2025. 

Legislation Overview:

 House Bill 177 (HB 177) allows parents of home-schooled children to claim a state income tax credit equal to their annual expenditures on curriculum materials, up to a maximum of $2,500 per child. Taxpayers must apply for eligibility certification from the Public Education Department (PED), which will issue dated certificates confirming the credit amount. The department will share electronic records of certifications with the Taxation and Revenue Department (TRD). If the credit exceeds the taxpayer’s liability, the remaining balance will be refunded.

Bill Implications

HB 177 is expected to reduce state income tax revenue by providing financial relief to home-schooling families. The total cost will depend on the number of eligible applicants and the extent to which they claim the full credit. Administrative costs for processing certifications and tax claims will be borne by PED and TRD. Refundable credits may increase overall tax expenditures beyond lost revenue from tax liabilities alone. 

Current Law:

 New Mexico does not currently offer tax credits for home-schooling expenses. Home-schooling families must cover curriculum costs without financial assistance from the state. HB 177 establishes a new tax benefit specifically for home-schooled students.