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2026 rules · verified against New Mexico's primary source
New Mexico partially exempts military retirement pay (up to about $30,000); the rest is taxable.
Military retirement pay is exempt up to $30,000 for tax years 2024-2026; a 2026 bill (HB221) to make it 100% exempt died in committee, so the $30,000 cap still applies for 2026.
Treatment
partially exempt
Exemption up to
$30,000
Top marginal rate
5.90%
Source: https://codes.findlaw.com/nm/chapter-7-taxation/nm-st-sect-7-2-5-13/ · verified July 2026
Estimated New Mexico state income tax on your military retirement, using the top marginal rate on the taxable portion (an upper bound; your effective rate is usually lower).
More New Mexico: all New Mexico veteran benefits · military retirement tax in every state · what your pension is worth