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Solar Market Tax Credit Supplemental

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FAQs:

New Solar Market Development Tax Credit (Supplemental) 

(For systems installed in 2020, 2021, 2022, and 2023 which have NOT received a credit*) 

 *If you installed your system in 2020, 2021, 2022, or 2023, and did not receive a credit because EMNRD had reached the cap on certificates it could issue in those years, the legislature created a supplemental tax credit that you could claim.  

 

1. What is the Supplemental New Solar Market Development Tax Credit (the “supplemental credit”)? 

In 2024, Governor Michelle Lujan Grisham signed a bill that updates New Mexico’s tax laws. That bill created a supplemental tax credit for solar thermal or photovoltaic systems installed in calendar years 2020 through 2023 where a taxpayer who was eligible for the tax credit certificate was nevertheless unable to obtain that certificate because EMNRD had exceeded the statutory cap on credits in any one of those years. Those taxpayers are eligible to apply to EMNRD for a Supplemental New Solar Market Development Tax Credit for their solar energy system.   

The supplemental tax credits will be issued for tax year 2023, regardless of the year the system was installed. The supplemental tax credit is available to help make whole taxpayers who would have received a tax credit in certain previous tax years if the annual aggregate cap on tax credits had not been reached. Taxpayers who wish to apply for the supplemental tax credit will need to submit a new application to EMNRD. The application portal should be available by late summer 2024. This application should require the same information as a regular New Solar Market Development Tax Credit application.    

 

2. How much tax credit is available for the supplemental tax credit?   

A total of $20 million dollars in New Solar Market Development Tax Credit will be available as a supplemental tax credit. This $20 million is only for the supplemental credit, and available only to applicants who submit a new application to EMNRD for a solar energy system that was installed in 2020, 2021, 2022, or 2023 and who were not previously able to obtain a credit.  

  

3. Do I have to have been previously rejected to qualify for the supplemental tax credit?

No, a prior application rejection is not necessary to qualify for the supplemental tax credit. 

 

4. Who is eligible to receive the supplemental credit?   

If you purchased and installed a solar energy system in 2020, 2021, 2022 or 2023 and the funds were exceeded, you may submit an application for your solar energy system for New Solar Market Development Tax Credit. Check eligibility to receive the supplemental tax credit.  

 

Some examples of eligible applicants: 

1) Your application was rejected due to the yearly cap on credits being reached when you applied.  

2) You were unable to complete your application because your solar vendor went out of business.  

3) Your application was incomplete, and by the time you resubmitted it, the yearly cap on credits had already been reached.  

4) You never applied, but your solar energy system, which was installed between March 1st, 2020, and December 31st, 2023, is eligible for the supplemental tax credit under EMNRD’s current rules.  

 

Note: Regardless of the year of installation, the supplemental solar tax credit certificate will be awarded for tax year 2023. 

  

5. When will the supplemental credit be available?   

EMNRD is in the process of updating its rules to administer this new tax credit program. We are working on an expedited timeline for this rulemaking and our goal is to make the supplemental tax credit application portal available by late summer 2024.   

   

6. To which tax year does this credit apply?  

Regardless of whether you purchased and installed the solar system in 2020, 2021, 2022 or 2023, the supplemental tax credit applies to tax year 2023.   

  

7. Does this mean I have to amend my 2023 taxes?  

It may. You can either: 

  1. File your 2023 taxes by April 15, 2024. If you do this, you can apply for the supplement tax credit when the application portal opens in late summer 2024. Upon receiving a certificate of eligibility for the tax credit, you will then have to amend your 2023 tax return to claim the credit.   
  2. Request an extension on your 2023 taxes. If you do this, you can apply for the supplemental credit when the portal opens and then file your 2023 taxes with your supplemental credit certificate in time to meet your extension deadline.  

 

Note: EMNRD cannot offer tax advice, and we recommend consulting with a tax professional to get advice specific to your situation.  

 

8. How will I know when the supplemental credit is available? 

EMNRD will conduct outreach through various media channels announcing the availability of the application portal. In approximately late summer 2024, when the portal is available, the electronic application portal on the website will display an option to apply for the supplemental tax credit.   

If your application was previously rejected and we have a record of that rejection, you may receive information from EMNRD via the email address you used for that application. If you do not receive an email from us, that does not mean you are ineligible, or that we lack a record of your application.  

For updates in the meantime, you may consider signing up for our newsletter, or checking back at this website.  

 

9. My solar contractor hasn’t responded or has gone out of business. What do I do?   

It may be possible for you to still receive a credit.  

EMNRD intends to treat systems installed by contractors who are non-responsive or no longer in business as “self-installed” by the applicant. However, the system must have passed an inspection and been deemed operational by a local building code authority (for example, the City of Albuquerque Building Safety Division, or Santa Fe Building Permit Division). If your jurisdiction does not have a building code authority, an inspection by a New Mexico licensed electrician may suffice.  

If your system is not ready for inspection, you will have to find and hire a different solar contractor to finish any work needed to pass inspection. Many solar contractors are willing to do this. 

Please note that, while the above is our intent, this approach needs to be codified in rule, and cannot be implemented until approved. As noted above, we hope to have new rules in place by late summer 2024.  

In the meantime, if you wish to file a complaint against a New Mexico business, you may do so with the NM Department of Justice. 

 

10. What needs to be included in my application for a supplemental solar tax credit?  

 When the application portal is open, we will post a list of required documents here. 

 

11. This credit can give me a tax credit up to $6000. But what if I don’t owe this much in taxes?  

This credit is a refundable credit, which means any amount above what you owe will be refunded to you by the state taxation and revenue department. 

 

12. I need assistance. Where can I get answers if I have more questions?

For more information, please visit our New Solar Market Development Tax Credit webpage. 

For further questions please email our main office at: emnrd.ecmd@emnrd.nm.gov