FAQs:

Geothermal Ground-Coupled Heat Pump Income Tax Credit (7-2-18.24) 

The New Mexico Legislature enacted this tax credit in 2024 to encourage New Mexico taxpayers to install high-efficiency ground-coupled heat pumps in their residences, businesses or agriculture enterprises.    

 

1) When does the tax credit start?

The tax credit is available for systems installed after January 1, 2024.

2)   When does the Heat Pump tax credit expire? 

December 31, 2034 

3) When will the electronic portal be open to accept applications? 

We expect the portal to open this fall after new rules, as required by law, are formally adopted. 

4) Who are the tax credits available for? 

Owners of New Mexico Residents, Businesses or Agricultural enterprises  

5) What are the heat pump efficiency requirements? 

Efficiency Ratio of 16 OR Coefficient of Performance (COP) of 3.4. The heat pumps must have been tested and certified by an independent 3rd party nationally recognized heating and cooling equipment testing facility, such as the Air-conditioning, heating, & Refrigeration Institute, and meet the latest energy star requirements.  

6) What is the cost benefit for receiving a tax credit? 

Receive 30% of the cost of materials and installations not to exceed $9,000 per individual taxpayer. 

7) Is there a limit for the tax credit? 

The credit shall not exceed $9,000 per individual taxpayer. 

8) What if the tax credit exceeds my tax liability? 

The taxpayer will receive a refund in the amount of the tax credit that exceeds their tax liability. 

9) Is there a maximum funding cap for NM? 

Yes, the maximum funding cap per year is $4 million. 

10) Is the tax credit first-come, first served? 

Yes, the order of acceptance is “first come, first served.”. 

11) Can I combine this tax credit with the NM Sustainable Building Tax Credit? 

No, it is not allowable to use the NM Sustainable Building Tax Credit in combination with the heat pump tax credit. 

12) Can I share this tax credit with other business owners? 

Yes, the credit can be shared in proportion to the ownership of a business enterprise. 

13) What if I file separately from my spouse? 

Husband and Wife: Couples filing separately can only claim half the credit.   

14) What if my business is a corporation? 

A Corporation may also get a 30% tax credit up to a maximum of $9000. 

15) What items are covered by the tax credit. 

The tax credit may be applied to geothermal space heating, geothermal air heating, geothermal process heating, geothermal space cooling or combination of geothermal system applications.  The tax credit will only cover the cost of materials and installation of items directly connected to the system that are necessary for the system to function as intended. 

 

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