A. Except as otherwise provided in Subsection B of this section, a taxpayer who for the 2007 taxable year files a New Mexico income tax return, is a full-year or first-year resident of New Mexico and is not a trust, estate or a dependent of another taxpayer is allowed a credit in the amount determined under Subsection C of this section. The credit may be allowed even though the taxpayer has no income taxable under the Income Tax Act for the 2007 taxable year.

B. A claim for the refundable tax credit provided in this section is not allowed for a resident who was an inmate of a public institution for more than six months during the 2007 taxable year.

C. The tax credit allowed in this section shall be in the amount determined from the following tables for:

(1)     married taxpayers filing jointly:

Adjusted Gross Income Over                     Not Over Credit Amount for Taxpayer and Spouse Additional Credit Amount for Each Dependent 0                         $30,000                        $100                         $50.00 $30,000                     $50,000                     $ 80.00                     $40.00 $50,000                     $70,000                     $ 50.00                     $25.00 $70,000                                                         $ 0.00                     $ 0.00; or

(2)     taxpayers filing as single, head of household, married filing separately or as a surviving spouse:

Adjusted Gross Income                     Credit Amount for Taxpayer Over                     Not Over Additional Credit Amount for Each Dependent 0                         $30,000                     $50.00                        $50.00 $30,000                     $50,000                     $40.00                        $40.00 $50,000                     $70,000                     $25.00                        $25.00 $70,000                                                         $ 0.00                        $ 0.00.

D. The tax credit allowed in this section may be credited by the department against the taxpayer’s New Mexico income tax liability. If the taxpayer is liable for interest and penalties on the taxpayer’s income tax liability for the 2007 taxable year prior to the effective date of this section, the amount of interest and penalties shall not be recomputed due to the credit provided by this section but may be satisfied by applying the credit to the penalty or interest due. Notwithstanding the provisions of Section 7-1- 68 NMSA 1978, interest in the amount established by Subsection B of Section 7-1-68 N.M. Stat. Ann. shall only be allowed and paid on the amount to be refunded under Subsection E of this section if not refunded or credited within one hundred twenty days after the effective date of this section or the applicable period established in Subsection D of Section 7-1-68 N.M. Stat. Ann., whichever is later.

E. If the tax credit exceeds the taxpayer’s income tax liability, the excess shall be refunded to the taxpayer.

F. For purposes of this section, “dependent” means “dependent” as defined by Section 152 of the Internal Revenue Code.