2025 Tax Benefits and Credits for Immigrants in New Mexico

Key Takeaways

• New Mexico’s Working Families Tax Credit offers 25% of the federal EITC, including for ITIN filers in 2025.
• Federal Child Tax Credit requires SSNs for parents and children; many immigrants with ITINs no longer qualify.
• Low- and middle-income families in New Mexico can claim exemptions up to $2,500 per qualified person.

Immigrants living and working in New Mexico in 2025 have access to several important tax benefits that can make a real difference for their families. These include the New Mexico Working Families Tax Credit (WFTC), which is the state’s version of the Earned Income Tax Credit (EITC), as well as exemptions for low- and middle-income earners. However, recent federal changes to the Child Tax Credit (CTC) have made it harder for some immigrant families to qualify for that benefit. Understanding how these programs work, who is eligible, and how to claim them is essential for immigrants who want to make the most of their tax returns. Here’s a step-by-step guide to the entire process, what to expect at each stage, and practical advice for getting the help you need.

Overview of Tax Benefits for Immigrants in New Mexico

New Mexico stands out as one of the most inclusive states when it comes to tax credits for immigrants. The state’s Working Families Tax Credit is available to people who file taxes using an Individual Taxpayer Identification Number (ITIN), not just those with a Social Security Number (SSN). This means that many undocumented immigrants and mixed-status families—where some members have legal status and others do not—can still get help from the state, even if they don’t qualify for similar federal programs.

The main tax benefits available to immigrants in New Mexico in 2025 include:

• Working Families Tax Credit (WFTC): New Mexico’s version of the Earned Income Tax Credit, set at 25% of the federal EITC amount.
• Low- and Middle-Income Exemption: Reduces taxable income for qualifying families.
• Federal Child Tax Credit (CTC): Available only to families where parents and spouses have SSNs, with stricter rules in 2025.

Let’s break down each benefit, explain who qualifies, and walk through the process of claiming them.

Step 1: Determine Your Eligibility

Before you start your tax return, it’s important to check if you qualify for these credits. Here’s what you need to know:

• Working Families Tax Credit (WFTC):
  • You must have earned income from work in 2025.
  • You can file taxes using either an SSN or an ITIN.
  • Young workers aged 18-25 can claim the credit, even if they don’t have children.
  • Your income must be below certain limits, which depend on your filing status and number of children. For example, a married couple with three or more children can earn up to about $68,675 and still qualify.
• Low- and Middle-Income Exemption:
  • Available to all taxpayers, including immigrants.
  • The exemption is up to $2,500 per qualified person on your tax return.
  • Income limits apply: single filers can earn up to $36,667, while married couples filing jointly can earn up to $55,000.
• Federal Child Tax Credit (CTC):
  • In 2025, both parents (and spouses if filing jointly) must have valid SSNs to claim the credit.
  • The child must also have an SSN and must have lived with you in the United States 🇺🇸 for at least six months during the year.
  • Many immigrants who file with an ITIN will not qualify for the federal CTC under the new rules.

If you’re not sure about your eligibility, you can use the New Mexico Taxation and Revenue Department’s resources or ask for help from a local tax clinic.

Step 2: Gather Your Documents

To claim these credits, you’ll need to collect some basic documents:

• Proof of income (such as W-2s, 1099s, or pay stubs)
• Your ITIN or SSN
• Information about your spouse and children (including their SSNs or ITINs, if they have them)
• Records showing your address and how long your children lived with you (for the CTC)

Having these documents ready will make the process much smoother.

Step 3: Prepare Your Federal Tax Return

Even if you’re mainly interested in state credits, you’ll need to file a federal tax return first. Here’s what to expect:

• If you have an SSN: You may be able to claim the federal EITC and CTC, depending on your income and family situation.
• If you have an ITIN: You cannot claim the federal EITC or, under the new 2025 rules, the federal CTC (unless your spouse has an SSN and you file jointly).

You’ll use the standard IRS forms, such as Form 1040 for your federal return. If you’re not eligible for the federal credits, don’t worry—New Mexico’s state credits are still available to you if you meet the requirements.

Step 4: Complete New Mexico Form PIT-1

To claim the Working Families Tax Credit and other state benefits, you’ll need to file the New Mexico Personal Income Tax Return (Form PIT-1). Here’s how the process works:

• Claiming the WFTC: On Form PIT-1, there’s a section where you enter the amount of your federal EITC. If you’re not eligible for the federal EITC because you have an ITIN, you can still calculate what your federal EITC would have been and use that number to figure out your state credit.
• Calculating the Credit: The WFTC is 25% of the federal EITC amount. For example, if your federal EITC would have been $8,046 (the maximum for a family with three or more children), your WFTC would be about $2,011.50.
• Refundable Credit: The WFTC is refundable, so you can get money back even if you don’t owe any state income tax.

Claiming the Low- and Middle-Income Exemption:

• On Form PIT-1, you’ll also find a section for the low- and middle-income exemption.
• Enter the number of exemptions you qualify for and your income. The form will help you figure out how much you can claim.

Estimated Timeframe:
– Preparing your state tax return usually takes a few hours if you have all your documents ready. If you use a tax preparer or free tax clinic, it may take a few days to get an appointment and complete the process.

Step 5: File Your State Tax Return

Once you’ve filled out Form PIT-1 and attached any required documents, you’re ready to file your New Mexico tax return. You can file:

• Electronically: This is the fastest way to get your refund. Many tax clinics and online services can help you file for free or at a low cost.
• By Mail: If you prefer, you can print your completed forms and mail them to the New Mexico Taxation and Revenue Department.

What to Expect from Authorities:

• Processing Time: Electronic returns are usually processed within a few weeks. Paper returns can take longer.
• Refunds: If you qualify for the WFTC or other refundable credits, you’ll receive your refund by direct deposit or check.
• Follow-Up: If there are any problems with your return (such as missing information or questions about your ITIN), the state may contact you for more details.

Step 6: Seek Assistance if Needed

Many immigrants find the tax process confusing, especially with changing rules about ITINs and SSNs. Fortunately, there are resources to help:

• Free Tax Clinics: Many community organizations in New Mexico offer free help with tax preparation, especially for immigrants and low-income families.
• Immigrant Advocacy Groups: These groups can help you understand your rights and make sure you claim all the credits you’re eligible for.
• New Mexico Taxation and Revenue Department: You can call (505) 827-0700 or visit their official website for help.

Estimated Timeframe:
– Getting help from a tax clinic may take a few days to a week, depending on demand. It’s best to start early in the tax season to avoid delays.

What Happens After You File

After you submit your tax return, here’s what you can expect:

• Confirmation: If you file electronically, you’ll get a confirmation that your return was received.
• Review: The state will review your return and check your eligibility for credits.
• Refund: If you’re owed a refund, it will usually arrive within a few weeks if you filed electronically. Paper returns may take longer.
• Questions: If the state needs more information, they’ll contact you by mail or phone. Respond quickly to avoid delays.

Recent Policy Changes and What They Mean for Immigrants

New Mexico has made a strong effort to include immigrants in its tax credit programs. The decision to keep the Working Families Tax Credit at 25% of the federal EITC for 2025 shows the state’s commitment to helping working families, including those who file with ITINs. This is especially important because federal rules for the Child Tax Credit have become stricter, making it harder for many immigrant families to qualify.

According to analysis by VisaVerge.com, New Mexico’s approach is seen as a model for other states. By allowing ITIN filers to claim the WFTC, the state helps ensure that more families can get the support they need, even if they’re left out of federal programs.

However, the new federal rule that requires SSNs for parents and spouses to claim the Child Tax Credit means that many immigrant families will lose access to this important benefit. This change has sparked debate among advocacy groups, who argue that it unfairly targets immigrants and makes it harder for children in mixed-status families to thrive.

Practical Tips for Immigrant Taxpayers in New Mexico

• Start Early: Begin gathering your documents and checking your eligibility as soon as possible. Tax clinics get busy as the deadline approaches.
• Use Official Forms: Always use the latest version of Form PIT-1 for your New Mexico return.
• Double-Check Your ITIN: Make sure your ITIN is valid and hasn’t expired. If you need to renew it, start the process early.
• Ask for Help: Don’t be afraid to reach out to local organizations or the New Mexico Taxation and Revenue Department if you have questions.
• Keep Records: Save copies of your tax returns, W-2s, and any letters from the state or IRS. You may need them in the future.

Summary Table of Key Tax Benefits for Immigrants in New Mexico (2025)

Official Resources and Where to Get More Help

• New Mexico Taxation and Revenue Department: For official forms, instructions, and details about the Working Families Tax Credit and other programs, visit the official website.
• IRS: For federal tax credits and information about ITINs and SSNs, visit irs.gov.
• Local Tax Clinics and Advocacy Groups: Many offer free or low-cost help with tax preparation and can answer questions about your specific situation.

Final Takeaways and Next Steps

Immigrants in New Mexico have some of the best access to state-level tax credits in the country, thanks to inclusive policies that allow ITIN filers to benefit from the Working Families Tax Credit and other exemptions. While federal changes to the Child Tax Credit have made it harder for some families to qualify, the state’s programs still offer meaningful support.

To make the most of these benefits:

• Check your eligibility for each credit and exemption.
• Gather your documents and complete your federal and state tax returns using the correct forms.
• Claim the Working Families Tax Credit on your New Mexico return, even if you’re not eligible for the federal EITC.
• Seek help from local organizations if you have questions or need assistance.
• File early to avoid delays and ensure you get your refund as soon as possible.

By following these steps and using the resources available, immigrant families in New Mexico can claim the tax benefits they deserve and improve their financial security in 2025.

Learn Today

Working Families Tax Credit (WFTC) → A New Mexico state credit equal to 25% of the federal Earned Income Tax Credit amount.
Earned Income Tax Credit (EITC) → A federal tax credit for low- to moderate-income workers based on earned income and family size.
Individual Taxpayer Identification Number (ITIN) → A tax processing number for immigrants ineligible for Social Security Numbers used to file taxes.
Social Security Number (SSN) → A government-issued number used by U.S. citizens and authorized workers to report wages and file taxes.
Federal Child Tax Credit (CTC) → A federal credit for eligible families with children who meet SSN and residency requirements.

This Article in a Nutshell

In 2025, New Mexico immigrants can access important tax benefits like the Working Families Tax Credit, even with ITINs. Despite federal Child Tax Credit limitations, the state offers exemptions and credits aiding low- and middle-income families to improve financial stability and claim refunds efficiently.
— By VisaVerge.com