VetTOCVeteran benefits reference

Display

Text size100%

Miscellaneous

New Mexico Armed Forces Retirement Pay Income Tax Exemption

Up to $30,000 a year of military retired pay, including disability retirement, is exempt from New Mexico income tax, and a surviving spouse can take the same $30,000 against a Survivor Benefit Plan annuity. The exemption has no end date: the 2024 act that added surviving spouses also repealed the sunset that guides still describe.

Also called: NMSA 7-2-5.13, military retirement, armed forces retirement pay, $30,000, Survivor Benefit Plan, SBP, House Bill 252, Laws 2024, ch. 67, House Bill 221, PIT-ADJ.

For: Veteran or service member, survivor.

Where it applies

Written for the jurisdictions listed here.

Section 7-2-5.13: "An individual who is an armed forces retiree or the surviving spouse of an armed forces retiree may claim an exemption in an amount equal to thirty thousand dollars ($30,000) of armed forces retirement pay includable, except for this exemption, in net income." Who is a retiree. Subsection B: "a former member of the armed forces of the United States who has qualified by years of service or disability to separate from military service with lifetime benefits". A medical retirement under chapter 61 counts as well as a 20-year retirement, and so does a Guard or reserve retirement once it is being paid. How it got here. House Bill 163 of 2022, Laws 2022, chapter 47, created the exemption at $10,000 for taxable year 2022, $20,000 for 2023 and $30,000 "for taxable years 2024 through 2026", and then it was to end. House Bill 252 of 2024, Laws 2024, chapter 67, signed March 6, 2024, replaced the schedule with a flat $30,000 with no end date and added surviving spouses, for taxable years beginning on or after January 1, 2025. Several guides still say the exemption runs "through 2026"; that was the 2022 law. What did not pass. Senate Bill 497 of 2025 and House Bill 221 of 2026 would each have removed the $30,000 cap and exempted all armed forces retirement pay. Both died in committee. The cap is $30,000. Per person, not per return. The exemption belongs to the individual retiree or surviving spouse, so two military retirees filing jointly can each claim $30,000 of their own retired pay. What is never taxed. VA disability compensation, dependency and indemnity compensation and combat-related special compensation are not in federal adjusted gross income, so New Mexico never reaches them. Active duty pay is separately exempt (see the military pay entry).

Thresholds

Thresholds for New Mexico Armed Forces Retirement Pay Income Tax Exemption
GateRule
$30,000 a year, with no sunset since 2025NMSA 1978, § 7-2-5.13(A), as amended by Laws 2024, ch. 67, § 32 (HB 252), for taxable years beginning on or after January 1, 2025.
A retiree by years or by disability, or the surviving spouseNMSA 1978, § 7-2-5.13(B).

Sources

Legislation

Law the tracker is watching for this entry. See the legislation tracker for every jurisdiction.

HB 221 (did not pass) Would have exempted all armed forces retirement pay from income tax

Catalog reconciledDid not pass

57th Legislature, 2nd Session, 2026

  1. Introduced Done, , step 1 of 6
  2. In committee Done, , step 2 of 6
  3. Died Stopped here, step 3 of 6
  4. Passed both chambers Not reached, step 4 of 6
  5. Signed by the governor Not reached, step 5 of 6
  6. In effect Not reached, step 6 of 6

Expands benefits Would have removed the $30,000 cap on the armed forces retirement income tax exemption.

Would have removed the $30,000 cap in NMSA 1978, § 7-2-5.13. Reported with a do pass recommendation by the House Labor, Veterans' and Military Affairs Committee on February 4, 2026 and then postponed indefinitely in House Taxation and Revenue. Senate Bill 497 of 2025, to the same effect, also died. The cap is $30,000.

Sponsors

  • John BlockRepublican, House, District 51
  • Stefani LordRepublican, House, District 22

And 3 more sponsors and 1 co-sponsor

Touches NMSA 1978, § 7-2-5.13

Official record

Laws 2024, ch. 67 (HB 252) Made the $30,000 armed forces retirement pay exemption permanent and extended it to surviving spouses

Catalog reconciledEnactedScope changed

Signed Takes effect

  1. Introduced Done, , step 1 of 6
  2. In committee Done, , step 2 of 6
  3. Passed one chamber Done, , step 3 of 6
  4. Passed both chambers Done, , step 4 of 6
  5. Signed by the governor Done, , step 5 of 6
  6. In effect Done, , step 6 of 6

Expands benefits Made the $30,000 armed forces retirement exemption permanent and extended it to surviving spouses.

Amended NMSA 1978, § 7-2-5.13, replacing the 2022 schedule that ended with taxable year 2026 by a flat $30,000 with no end date, and adding the surviving spouse of an armed forces retiree, for taxable years beginning on or after January 1, 2025. Signed March 6, 2024. Guides still describe the exemption as running through 2026.

Sponsor

  • Derrick J. LenteDemocratic, House, District 65

Touches NMSA 1978, § 7-2-5.13

Official record

Updated

Last updated .

What changed then:

  • Source removed: “Army benefits library, New Mexico”.

Request an update

Out of date, a broken link, or something else wrong? Say what you found, and an editor checks it against the official source.

Disclaimer

VetTOC is not affiliated with the U.S. Department of Veterans Affairs or the Department of Defense. Information is for reference only and is not an eligibility determination. Verify with VA, the relevant state or territory, or an accredited VSO.