Media Advisory: New Mexico streamlines Child Care Assistance Program with GRT deduction, ensuring cost-free care for families
Some families were charged GRT each month for their Child Care Assistance Program contracts. This change makes child care cost-free for all.
Visit the Early Childhood Education and Care Department Newsroom here .
CONTACT:
Julia Sclafani (she/her)
Public Relations Specialist
505-699-5937 / julia.sclafani@ececd.nm.gov
FOR IMMEDIATE RELEASE
July 17, 2024
New Mexico streamlines Child Care Assistance Program with GRT deduction, ensuring cost-free care for families
SANTA FE — New changes that went into effect on Monday, July 1, 2024, regarding Gross Receipts Tax (GRT) and Child Care Assistance payments ensure that child care is truly cost-free for every household benefitting from the Child Care Assistance Program.
In line with New Mexico’s commitment to creating a universal, affordable, and high-quality early care and education system, Gov. Michelle Lujan Grisham signed HB 252 which changed the state tax code to allow providers to deduct their receipts from Child Care Assistance Program contracts or NM PreK grants from taxable gross receipts.
Previously, some families were charged GRT each month for their Child Care Assistance Program contracts. These households will no longer be burdened with the cost of GRT for Child Care Assistance payments made after July 1. Following this change, the Early Childhood Education and Care Department (ECECD) updated regulations to prohibit child care providers from passing along GRT costs to families for their Child Care Assistance contracts.
Households with Child Care Assistance contracts who were not being charged GRT will experience no change.
“This change furthers the administration’s commitment to free child care for all families receiving child care assistance,” said ECECD Secretary Elizabeth Groginsky. “ECECD is focused on realizing the Governor’s vision of universal, affordable, high-quality child care for New Mexico families and working to remove financial barriers to accessing the early care and education programs and services that children in New Mexico deserve.”
To learn more about the Child Care Assistance Program, including eligibility guidelines, visit the Child Care Assistance Program page on ECECD’s website.
Changes for Child Care Providers
HB 252 changed the state tax code to allow providers to deduct their receipts from Child Care Assistance Program contracts or NM PreK grants from taxable gross receipts. This means if child care providers claim the deduction, they will not have to pay GRT on these receipts, though the receipts still need to be reported. An instructional video by New Mexico Taxation and Revenue Department (NMTRD) on how to claim this deduction is available online: Reporting Locations and Claiming Deductions for Gross Receipts Tax . A helpful GRT Filer’s Kit provided by NMTRD can be found here .
If you have questions about filing this deduction or other taxes, please contact the NMTRD at 1-866-285-2996 or consult your accountant. NMTRD call center information, field office locations, and an inquiry form can be found at https://www.tax.newmexico.gov/send-us-a-message/.
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