Military Retirement Pay Income Tax Exemption
First $30,000 of military retirement pay exempt from NM state income tax.
At a glance
- Benefit type
- Tax Benefits — New Mexico
- Who it's for
- Veterans, Survivors
- VA rating needed
- No rating requirement
- Estimated value
- Approximately $1,500-$1,800/year
- Where it applies
- New Mexico
- Last verified
- May 12, 2026
What is Military Retirement Pay Income Tax Exemption?
Military Retirement Pay Income Tax Exemption is a New Mexico tax benefits benefit for veterans, survivors. First $30,000 of military retirement pay exempt from NM state income tax. The listed value is Approximately $1,500-$1,800/year.
Who qualifies
- Available to any veteran
- New Mexico residency
Who is eligible
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.
What Military Retirement Pay Income Tax Exemption covers
Covers
First $30,000 of military retirement pay is exempt from NM state income tax (effective January 1, 2025). The 2024 amendment removed the prior sunset, making the exemption permanent, and explicitly extended eligibility to surviving spouses of qualified U.S. armed forces retirees.
How to apply for Military Retirement Pay Income Tax Exemption
How to claim
Claimed on NM state income tax return.
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.
Frequently asked questions about Military Retirement Pay Income Tax Exemption
Who qualifies for Military Retirement Pay Income Tax Exemption?▾
How much is Military Retirement Pay Income Tax Exemption worth?▾
How do I apply for Military Retirement Pay Income Tax Exemption?▾
Where can I verify Military Retirement Pay Income Tax Exemption?▾
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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