Geothermal Heat Pump Tax Credit (Personal)

Summary

H.B. 375, enacted in April 2009, created a New Mexico state tax credit for geothermal heat pumps purchased and installed between January 1, 2010, and December 31, 2020, on property owned by the taxpayer. The credit is worth 30% of the system's cost up to $9,000 and can be applied to individual or corporate income taxes. Any unused credit may be carried forward for up to 10 years.

To qualify for the credit, system owners must file an application with the Energy, Minerals and Natural Resources Department (EMNRD). EMNRD will review and approve applications in the order they are received until the annual aggregate cap of $2,000,000 in tax credits has been reached. For an application to be approved by EMNRD, systems must have either a minimum coefficient of performance of 3.4 or an efficiency ratio of 16 or greater and be installed by an accredited installer certified by the International Ground Source Heat Pump Association. Additional technical specifications and requirements relating to safety, building code and standards compliance, minimum system sizes, system applications, and lists of eligible components can be found in the New Mexico Administrative Code linked above.