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State Benefit·New Mexico·🏛️Tax Benefits

Military Disability Retirement Pay Exclusion

Military disability retirement pay is excluded from NM state taxable income.

Verified May 12, 2026againstdvs.nm.gov

At a glance

Benefit type
Tax Benefits — New Mexico
Who it's for
Veterans
VA rating needed
No rating requirement
Where it applies
New Mexico
Last verified
May 12, 2026

What is Military Disability Retirement Pay Exclusion?

Military Disability Retirement Pay Exclusion is a New Mexico tax benefits benefit for veterans. Military disability retirement pay is excluded from NM state taxable income.

Who qualifies

Veterans
  • Available to any veteran
  • New Mexico residency

How to apply

Apply through the official New Mexico agency.

Open application

Who is eligible

Eligibility

Veterans receiving military disability retirement pay as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service.

What Military Disability Retirement Pay Exclusion covers

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 apply for Military Disability Retirement Pay Exclusion

How to claim

Excluded when filing NM state income tax return.

Open applicationVerify at official source

Verified information & sources

Last verified: May 12, 2026

Official source: dvs.nm.gov

Compiled and fact-checked against the official source linked above. Benefit rules and dollar amounts change over time — always confirm current details at the official source before applying. A county Veterans Service Officer (VSO) is a free, accredited advocate who can review your eligibility and help you file at no cost.

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Frequently asked questions about Military Disability Retirement Pay Exclusion

Who qualifies for Military Disability Retirement Pay Exclusion?▾
Military Disability Retirement Pay Exclusion is for Veterans; available to any veteran; new mexico residency. See the eligibility details on this page and confirm with the official source before applying.
How do I apply for Military Disability Retirement Pay Exclusion?▾
Apply through the official source linked on this page. A county Veterans Service Officer (VSO) can review your eligibility and help you file at no cost.
Where can I verify Military Disability Retirement Pay Exclusion?▾
Benefit rules and dollar amounts change, so always confirm current details at the official source linked on this page. A free, accredited county or state Veterans Service Officer (VSO) can also verify your eligibility and help you apply.

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

See every benefit you qualify for in New Mexico

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