Bill > SB497

This bill removes the existing $30,000 cap on the income tax exemption for armed forces retirement pay, instead allowing military retirees and their surviving spouses to claim an exemption for the entire amount of their retirement pay when calculating their state income tax. The bill defines an "armed forces retiree" as a former member of the U.S. military who has qualified for lifetime benefits through years of service or disability. Specifically, the legislation amends Section 7-2-5.13 of New Mexico state law to eliminate the dollar limit on the exemption, effectively providing a full tax exemption for military retirement income. The new tax provision will take effect for taxable years beginning on or after January 1, 2026, which gives taxpayers and state tax authorities time to prepare for the change. This modification is likely intended to provide additional financial support and tax relief for military veterans and their families living in New Mexico.

Budget and Finance

https://www.nmlegis.gov/Legislation/Legislation?chamber=S&legtype=B&legno=497&year=25