The credit equals 50 percent of the federal welfare-to-work credit for which the employer is eligible, up to $1,750 for the first year of employment and rising to $2,500 for the second year. The state credit piggybacks on the federal credit of the same name and can be applied to New Mexico personal or corporate income tax.

For a person hired, employer receives from the state 50 percent of the credit earned for federal purposes. Credit can be earned on the same individual employed by the same employer for up to 2 years.

State maximum credit amounts are $1,750 for the first year, $2,500 for the second year per qualifying employee, and any part of the remaining credit may carry forward at the end of the taxable year for three consecutive taxable years. An employer must first qualify for the federal credit. Additional criteria:

• Hiring of the individual must increase the employer’s total number of jobs (over the average in the preceding calendar year) or replace a previous qualified employee.
• Wage, benefits, and working conditions must be comparable with similar jobs of that same employer.
• Employee must live in a high unemployment county determined by the Department of Labor to have had an unemployment rate exceeding 10 percent in six or more months in the previous calendar year (determined every January).
• Corporations or individuals attach their New Mexico Department of Labor certification to the appropriate tax forms and submit to New Mexico Tax and Revenue Department.