Is My Military Pension or Retirement Income Taxable to New Mexico?

For tax year 2026, up to $30,000 of military retirement pay or Survivor Benefit Plan (SBP) payments may be excluded from New Mexico taxable income.

The exemption is available to:

• Retirees of the U.S. Armed Forces who qualified for lifetime retirement benefits through years of service or disability.
• Surviving spouses of qualifying armed forces retirees.

If both spouses qualify and file a joint return, each qualifying spouse may claim an exemption of up to $30,000 of eligible armed forces retirement pay included in net income.

Program Entry

To apply this exemption to your New Mexico return:

1. Go to State Section.
2. Select the three dots to edit the New Mexico State return.
3. Select Deductions from Income.
4. Enter the amount of your retirement pay included in your net income.

Additional Information

The military retirement exemption is claimed on Schedule PIT-ADJ as the Exemption for Armed Forces Retirement Pay.

Be sure to enter only the amount of qualifying military retirement income that was included in your taxable income before the exemption is applied.