The following income can be subtracted/deducted from your New Mexico return:
NM Tax-Exempt Interest and Dividends
Enter the total interest or dividend income you received from the following state and local bonds exempt from New Mexico taxable income:
- obligations of the State of New Mexico or its agencies,
- institutions or political subdivisions.
Also enter interest or dividend income from obligations of the Commonwealth of Puerto Rico, Guam, Virgin Islands, American Samoa or Northern Mariana Islands.
Net Operating Loss Carryforward
Enter the carry-forward amount to be applied against New Mexico taxable income for 2023, but only if:
- Your current federal tax return shows a net operating loss carry-forward amount, or
- You have an unused New Mexico net operating loss carry-forward amount from a previous year.
Taxable Railroad Retirement Act Annuities and Benefits and taxable Railroad Unemployment Insurance Act sick pay
Deduct taxable Railroad Retirement Act annuities and benefits and taxable sick pay under the Railroad Unemployment Insurance Act, and attach Form(s) RRB-1099 and RRB-1099R if those amounts were part of your federal taxable income.
Income of an Indian Wholly Earned on the Reservation
If you or your spouse, or both, were enrolled members of a New Mexico federally recognized Indian nation, tribe, band or pueblo, your income is exempt from base income if:
- You lived on the land of the Indian nation, tribe, band or pueblo of membership when you earned it, and
- You earned that income on the lands of that nation, tribe, band or pueblo.
*Note: You must meet both conditions.
Income earned off the lands of your own or your spouse's nation, tribe or pueblo is subject to New Mexico income tax no matter where you live. Military pay of an enrolled member is exempt only for times when the home of record is on the member's own Indian nation, tribe or pueblo lands.
Retirement or pension income is exempt only when the retirement or pension is the result of employment on the member's Indian nation, tribe or pueblo. Retirement or pension income from employment off the lands of the nation, tribe or pueblo may not be deducted.
Income Deduction for 100 years of Age
You, your spouse, or both are age 100 or over and not a dependent of another taxpayer are tax exempt.
Deduction for New Mexico Medical Care Savings Account
If you or your spouse are enrolled in a New Mexico Medical Care Savings Account, (NMMSA) established by an employer, and during 2023 you have made or received contributions to the account or have made or received distributions from the account you may be entitled to claim a New Mexico medical care savings account exemption.
Deduction for Contributions to NM Education Trust Account
Deduct contributions you made during the tax year to the New Mexico Education Trust Fund (to an account in one of the New Mexico-approved Section 529 college savings plans) for each beneficiary. Contributions include the principal and earnings portion of amounts rolled over to a New Mexico-approved Section 529 college savings plan account from a non-New Mexico-approved Section 529 college savings plan.
*Note: You may only deduct contributions to a Section 529 Plan established and approved by the New Mexico Education Trust Board. A husband and wife who file separate returns may each claim half the deduction allowed on a joint return.
Military Active Duty Pay
Enter the pay, wages or salaries paid to you or your spouse for active duty military service in the armed forces of the United States, if it was included in the federal adjusted gross income and reported on line 9 of Form PIT-1. This exemption from state income tax applies to residents and non-residents of New Mexico.
Medical Care Expenses for Persons Age 65 Years or Older
If you, and/or your spouse, have unreimbursed medical expenses over $28,000 then you may qualify for a deduction up to $3,000 exemption and $2,800 credit.
Medical Care Expenses Deduction
If eligible you may claim a subtraction/deduction for expenses you incurred for medical care for you, your dependents or spouse. You may include any unreimbursed expenses already claimed on your federal Schedule A.
Deduction for Organ Donation-Related Expenses
Any human organ donation-related expenses, including lost income, lodging expenses, and travel expenses for you, spouse or dependent, you can deduct up to $10,000.
Non-Resident U.S. Public Health Service Members’ Active Duty Pay
Enter the amount of income earned in New Mexico for active duty in the USPHS only if you are a non-resident of New Mexico. If you changed residency or domicile to or from New Mexico during the tax year, enter only the pay you earned while you were a non-resident of New Mexico.
Liquor License Lessor Deduction
Enter the amount from net income equal to the gross receipts from sales of alcoholic beverages made by the liquor license lessee. A taxpayer must be a NM liquor license lessor and have held license on June 30, 2021 to claim up this deduction for up to $50,000.
NM Guard Member Life Insurance
An individual who receives a reimbursement from the National Guard Service Member’s Life Insurance Reimbursement Fund may claim a personal income tax exemption in the amount of the reimbursement. The reimbursements are issued by the New Mexico Office of Military Affairs, which sends each recipient a Form 1099-Misc for the reimbursement. Attach the Form 1099-Misc to support the New Mexico National Guard member life insurance reimbursements tax exemption claimed.
Deduction for certain expenses related to a NM licensed cannabis business
Enter the amount equal to any expenditure that is eligible to be claimed as a federal income tax deduction but is disallowed by Section 280E of the Internal Revenue Code.
- State Section
- Deductions from Income
See instructions for PIT-ADJ