Military Retirement Pay Income Tax Exemption
First $30,000 of military retirement pay exempt from NM state income tax.
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Apply directly through the official New Mexico agency.
About this benefit
Eligibility
Armed forces retiree qualified by years of service or disability to separate with lifetime benefits, or surviving spouse of such a retiree. Must file NM state income tax.
Covers
First $30,000 of military retirement pay is exempt from NM state income tax (effective January 1, 2025).
How to claim
Claimed on NM state income tax return.
Verified against official source
Last checked 2026-05-05 against law.justia.com. 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 Disability Retirement Pay Exclusion
Military disability retirement pay is excluded from NM state taxable income.
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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