Military Disability Retirement Pay Exclusion
Military disability retirement pay is excluded from NM state taxable income.
Who qualifies
- Available to any veteran
- New Mexico residency
Details
Eligibility
Veterans receiving military disability retirement pay as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service.
Covers
Disability retirement pay is not included in taxable income for NM state tax purposes. Value varies by amount of disability pay received.
How to claim
Excluded when filing NM state income tax return.
Always confirm current rates and rules with the New Mexico state agency before applying.
Other New Mexico Tax Benefits
Veteran Property Tax Exemption
$10,000 reduction from taxable property value for all honorably discharged veterans.
$100-$200/year
Military Retirement Pay Income Tax Exemption
First $30,000 of military retirement pay exempt from NM state income tax.
Approximately $1,500-$1,800/year
Proportional Disabled Veteran Property Tax Exemption
Property tax reduction proportional to VA disability percentage for all disabled veterans. Effective 2026.
Proportional to disability rating; potentially thousands/year
100% Disabled Veteran Property Tax Exemption
Complete exemption from all property taxes on primary residence for 100% P&T disabled veterans.
$2,000-$4,000+/year on a $250,000 home
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