Does New Mexico tax military retirement pay?
Partly taxed
Partly. Each armed forces retiree, or surviving spouse of one, can exempt $30,000 of armed forces retirement pay. On a joint return where both qualify, each gets the exemption.
In the state's own words
Copied word for word from the official document linked below each quote:
“Each qualifying armed forces retiree or surviving spouse of an armed forces retiree may claim an exemption in an amount equal to $30,000 of armed forces retirement pay includable, except for this exemption, in net income.”
Other retirement income in New Mexico
Yes. New Mexico taxes pensions. People 65 or older may get an exemption of up to $8,000 each, depending on income and filing status. The New Mexico pension page has the details, and the New Mexico Social Security page covers Social Security. For most people, no. New Mexico exempts Social Security for taxpayers under its income limits. Above them, the benefits are taxed.
Before you file or move
This page is about state income tax only. Your federal return has its own rules for military retired pay, and VA disability compensation is a separate benefit from retired pay. State rules change, and the details (age, years, which kinds of pay qualify, survivor benefits) matter. Check with the New Mexico Taxation and Revenue Department before you file or move.
Other states in the same group
Check our work
The answer above comes from this document. Follow the link and compare.
- Instructions for 2025 PIT-ADJNew Mexico Taxation and Revenue Department. Read on November 13, 2026.