Tax credit rule goes into effect

The Solar Market Development Income Tax Credit rule went into effect upon its publication in the New Mexico Register last week.

New Mexicans can submit an application for the tax credit through the Energy, Minerals and Natural Resources Department (EMNRD) Energy Conservation and Management Division’s website.

It offers a 10% tax credit on solar system installation costs for qualified solar thermal and photovoltaic systems, up to a maximum of $6,000. The provisions of the new tax credit apply to systems that are purchased or installed on or after March 1, 2020, and before Jan. 1, 2028.

Solar panels reduce emissions and save money over time by cutting electricity bills; however, the initial costs of buying solar panels often are out of reach for many New Mexicans. The Solar Market Development Income Tax Credit aims to offset these costs so more New Mexico families and small businesses can use solar energy.

“Expanding solar energy reduces climate pollution and creates local jobs,” EMNRD Cabinet Secretary Sarah Cottrell Propst said.

The property owner must submit applications from where the solar system is located. Approval is a multi-step process. First, the applicant must submit an application to EMNRD. Applications will be reviewed in the order they are received. If any required documents are missing, the application will be rejected and the applicant will need to resubmit. There is an annual cap of $8 million available for the tax credit on a first come, first serve basis.

Once an application has been approved by EMNRD, a certificate of eligibility for the tax credit will be issued via postal mail to the applicant. The certificate is valid for five years. To receive the tax credit itself, the applicant must attach the certificate to the NM Taxation and Revenue Department claim form 41406 and submit with their New Mexico PIT filing.

The link to EMNRD’s application is here: https://tinyurl.com/y4fvbsbc