Welcome to the electronic application portal for the Geothermal Ground Coupled Heat Pump Tax Credit. A New Mexico individual taxpayer who installs a geothermal ground-coupled heat pump system on property they own between May 15, 2024, and December 31, 2034, may qualify for a refundable income tax credit of up to 30% of the purchase and installation costs up to $9,000 dollars. This applies to systems installed in residences, businesses, or agricultural enterprises located in New Mexico. The net cost of acquiring the system, excluding any disallowed costs, is used to determine the credit amount. The tax credit fund year is determined by the date the building code authority certifies a successful inspection of the system.

Qualification Requirements:

Operational Status: The system must be fully functional and in use.

Efficiency Standards: The system must meet at least one of the following:

• A Coefficient of Performance (COP) of 3.4 or higher
• An Energy Efficiency Ratio (EER) of 16 or greater

Installation Requirement: The system must be installed by an installer certified by a recognized authority, IGSHPA (International Ground Source Heat Pump Association) or a similar organization. The system must also pass final inspection by the relevant local building authority

Overview of tax credit process:

Step 1 – Purchase and install an operating Geothermal Ground Coupled Heat Pump system.

Step 2 – Obtain required documents from installation contractor.

Step 3 – Apply for a tax credit here with Energy Minerals and Natural Resources Department (EMNRD).

Step 4 – Receive a certificate of eligibility from EMNRD.

Step 5 – File your tax credit with the New Mexico Taxation and Revenue Department and include EMNRD’s certificate of eligibility with your tax return.

Taxpayers must apply through the New Mexico Energy, Minerals and Natural Resources Department (EMNRD) application portal with all required documents. Processing takes approximately three to four weeks. Once the tax credit is approved, EMNRD will send a certificate of eligibility to the email address provided in the application. To receive the tax credit, the certificate of eligibility must be included with the taxpayer’s New Mexico income tax return.

Required Documents:

1. Proof of property ownership (deed, mortgage statement, or property tax bill)

2. Itemized invoice from installer listing equipment and labor costs

3. Heat Pump Manufacturer documentation (model, specifications, and performance ratings)

4. Installer certificate from a recognized authority, IGSHPA (International Ground Source Heat Pump Association) or a similar organization

5. Final passing inspection report from the local building authority

6. System design schematic and technical specifications