According to the New Mexico filing instructions, "you must file a resident return if both the following are true:
- You were domiciled in New Mexico at the time of enlistment.
- You have not changed your domicile for purposes of withholding state income tax from military pay."
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
- New Mexico Resident Return
- Deductions from Income
- Enter the amount of military wages included on your federal return
- Save
If you are a nonresident of New Mexico, your active duty military pay is not taxable on the New Mexico nonresident return.
To enter the deduction in your account, follow these steps in the program:
- State Section
- New Mexico Nonresident Return
- Deductions from Income
- Enter the amount of military wages included on your federal return
- Save
If one spouse is a resident of New Mexico and the other is not, file a PIT-1 return and include PIT-B to allocate the income.
To allocate the income, follow these steps in the program:
- State Section
- New Mexico Return
- Additions to Income
- NM Allocation and Apportionment of Income (PIT-B)
- Allocation of Wages
For more Information, see