For the 2025 tax year, Active Duty Military income is exempt from New Mexico's personal income tax.
If you are a Resident of New Mexico, you can claim a deduction for the Active Duty Military Pay included in your Federal Adjusted Gross Income.
To enter the deduction in your account, follow these steps in the program:
- State Section
- Three dots to edit New Mexico Resident Return
- Deductions from Income
- Enter the amount of military wages included on your Federal return
- Continue to Save
If you are a Non-Resident of New Mexico, your Active Duty Military Pay is not taxable on the New Mexico Non-Resident return.
To enter the deduction in your account, follow these steps in the program:
- State Section
- Three dots to edit New Mexico Non-Resident Return
- Deductions from Income
- Enter the amount of military wages included on your Federal return
- Continue to Save
Military Spouses: A Non-Resident military spouse's income earned in New Mexico is also exempt from state income tax, provided they meet specific requirements such as having the same state of residence as the service member who is a resident of another state.
If one spouse is a Resident of New Mexico and the other is not, file a PIT-1 return and include Schedule PIT-B to allocate the income.
To allocate the income, follow these steps in the program:
- State Section
- Three dots to edit New Mexico Return
- Additions to Income
- NM Allocation and Apportionment of Income (PIT-B)
- Allocation of Wages