New Mexico Child Tax Credits Help Lift Families Out of Poverty, Report Finds

Child tax credits play a vital role in providing financial support to parents and helping lift children out of poverty, according to a recent report from New Mexico’s Voices for Children.

Jacob Vigil, the nonprofit’s deputy policy director, highlighted that in addition to the federal child tax credit, New Mexico is one of 16 states that offers its own child tax credit. These credits, especially refundable ones, are considered one of the most effective tools in combating poverty, as they deliver direct financial assistance to families who can best determine their needs.

“These tax credits provide essential, non-stigmatizing help to families in greatest need,” Vigil said.

In New Mexico, the state’s child tax credit program returned $132 million to nearly 240,000 households this year. The amount varies depending on income, with the largest credits aimed at low-income families. As a refundable credit, families can receive the full amount they qualify for, even if they have no tax liability.

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Research shows that generous child tax credits contribute to long-term improvements in health, earning potential, and educational outcomes, including higher college attendance rates. Vigil noted the significant impact of federal child tax credits during the pandemic, particularly in New Mexico.

“When the federal Child Tax Credit expanded and became fully refundable in 2021, 450,000 children in New Mexico—95% of the child population—benefited. This helped lift 32,000 children out of poverty,” Vigil reported.

However, the situation changed after the pandemic. The federal child tax credit is no longer fully refundable, meaning that 36% of the state’s lowest-income families no longer qualify for the full credit. Meanwhile, high-income households, such as married couples earning up to $400,000, still receive the full credit.