To claim the Agricultural Water Conservation Tax Credit, you will need to print off and manually complete New Mexico Form RPD-41319, then enter the calculated amount in your TaxACT return.

To enter the amount of the manually calculated credit in the TaxACT program:

1. From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click New Mexico directly below the Basic Info tab
2. Click Credits to expand that section and then click PIT-CR Non-Refundable Credits
3. Continue to the screen titled New Mexico – Other Non-Refundable Credits and enter the amount in the box Agricultural water conservation tax credit (Attach RPD-41319):

The credit will flow to Line 14 of New Mexico Form PIT-CR and then to Line 21 of New Mexico Form PIT-1.

In the New Mexico electronic filing steps the screen titled New Mexico E-File Step – Attachments will explain the need to mail Form PIT-8453 with the supporting schedules or statements to the New Mexico Taxation and Revenue Department after the return has been accepted electronically. This enables you to electronically file the return and still submit the required forms to the State of New Mexico.

Additional Information:

Per the instructions for PIT-CR Schedule New Mexico Non-Refundable Credits, page 5:

LINE 14 Agricultural Water Conservation Tax Credit.

A taxpayer may claim a credit against the taxpayer’s personal or corporate tax liability for expenses incurred by the taxpayer for eligible improvements in irrigation systems or water management methods. Eligible improvements means an improvement that is:

• made on or after January 1, 2008;
• consistent and complies with a water conservation plan approved by the local soil and water conservation district in which the improvement is located; and
• primarily designed to substantially conserve water on land in New Mexico that is owned or leased by the taxpayer and used by the taxpayer or the taxpayer’s lessee to produce agricultural products, harvest or grow trees, or sustain livestock.

The amount of the credit is 35% of eligible expenses incurred in calendar year 2008 and 50% of eligible expenses incurred in subsequent years through December 31, 2012. The total credit allowed in a tax year may not exceed $10,000.

To claim the agricultural water conservation tax credit, you must first obtain a certificate of eligibility from the local Soil and Water Conservation commission within the district which encompasses the land upon which the improvement is or will be located. To find your local Soil and Water Conservation Commission district, visit www.nmda.nmsu.edu/natural-resources/soil-and-water-conservation-program, or call (575) 646-2642.

To claim the credit, complete Form RPD-41319, Agricultural Water Conservation Tax Credit Claim Form, and attach it to your Form PIT-1 with Schedule PIT-CR and a copy of the certificate of eligibility received from the Soil and Water Conservation Commission. 

For assistance claiming the credit, call (505) 476-3683.

Note: The agricultural water conservation tax credit provisions are repealed effective January 1, 2013.

FYI-106, Claiming Tax Credits For CRS Taxes and Business-Related Income page 6:

Agricultural Water Conservation Tax Credit

• Income Tax Act, Section 7-2-18.20 and Corporate Income and Franchise Tax Act, Section 7-2A-22
• For PIT, CIT and PTE taxpayers
• Non-refundable

Corporate and personal income tax credits are allowed for agricultural water conservation expenses. Agricultural water conservation expenses are expenses incurred by the taxpayer for eligible improvements in irrigation systems or water management methods. The expenses must be made on or after January 1, 2008; comply with a water conservation plan approved by the local soil and water conservation district in which the improvement is located; and be primarily designed to substantially conserve water on land in New Mexico that is owned or leased by the taxpayer and used by the taxpayer or that taxpayer’s lessee to produce agricultural products, harvest or grow trees, or sustain livestock. The credit may be claimed for the taxable year in which the expenses are incurred if the taxpayer: 1) in that year, owned or leased a water right appurtenant to the land on which an eligible improvement was made; 2) filed a New Mexico income tax return for that year; 3) in that year, was not a dependent of another individual; and 4) did not and will not take a tax credit for the same expense on a corporate and a personal income tax return. The credit amount is 35% of eligible expenses incurred in calendar year 2008, and 50% of expenses in subsequent years through December 31, 2012. The credits are limited to a maximum of $10,000 per year per taxpayer. These agricultural water conservation tax credit provisions are repealed, effective January 1, 2013.

How to claim the credit:

To apply for the agricultural water conservation tax credit, a taxpayer must obtain an application package from the Soil and Water Conservation District which encompasses the land upon which the applicant is claiming that an eligible improvement has occurred. To find a local Soil and Water Conservation District, a taxpayer may visit www.nmda.nmsu.edu/naturalresources/soil-and-water-conservation-program, or call (575) 646-2642. Once the application is approved, the district will issue a certificate of eligibility. If more than one owner, partner or member is entitled to the credit, each owner, partner or member will receive a separate certificate of eligibility. Upon receipt of a certificate of eligibility, the owner, partner or member may claim the credit against their personal or corporate income tax by attaching a completed Form RPD-41319, Agricultural Water Conservation Tax Credit Claim Form, and a copy of the certificate of eligibility to the tax return for the tax year in which the credit is approved. If the amount of the credit exceeds the tax due, the owner, partner or member may carry the excess forward for not more than five consecutive tax years.