New Mexico veteran taxes

Military retired pay in New Mexico

Partly exempttax year 2025Source 1

New Mexico lets each qualifying armed forces retiree exempt $30,000 of armed forces retirement pay included in net income, with no age or income test; if both spouses on a joint return qualify, each may claim $30,000 (2025 Schedule PIT-ADJ, line 24). An armed forces retiree is a former member of the U.S. armed forces who qualified by years of service or disability to separate with lifetime benefits.

Survivor Benefit Plan annuities

Partly exemptSource 1

The same $30,000 exemption is available to the surviving spouse of an armed forces retiree for armed forces retirement pay included in net income (2025 Schedule PIT-ADJ, line 24). The instructions do not name the Survivor Benefit Plan and do not address annuities paid to a child.

Property tax relief for disabled veterans

Exemption or creditSources 2, 3

New Mexico gives a veteran determined by the U.S. Department of Veterans Affairs to have a service-connected disability, and honorably discharged (not dishonorably or with a bad conduct discharge), an exemption from the taxable value of the property equal to the veteran’s VA service-connected disability rating, on the property the veteran occupies as the principal place of residence, including joint or community property with the spouse. The veteran applies with DVS Form 1 (Revised March 2025) to the New Mexico Department of Veterans Services, which certifies eligibility.

• Separately, the veteran exemption takes up to $10,000 off the taxable value of property owned by a resident veteran or the veteran’s un-remarried surviving spouse.

Vehicle registration for disabled veterans

Fee waiver or discountSources 4, 5, 6

New Mexico issues the 50 percent disabled veteran plate for up to two vehicles, including motorcycles, to a veteran who shows proof of being 50% disabled, and collects no fee for it, including the regular registration fee. Additional Disabled Veteran plates are available at standard registration and plate fees.

• A 50% disabled veteran who also qualifies for the disabled person plate may have the wheelchair symbol on the plate; the free plates carry PERMANENT instead of an annual sticker.
• A resident veteran who lost, or lost the use of, one or both legs at or above the ankle or one or both arms at or above the wrist while serving or from a service-connected cause is exempt from the Motor Vehicle Excise Tax.
• The plate becomes invalid when the holder dies; the MVD form gives no surviving-spouse continuation for the Disabled Veteran plate.
• Instead of the Disabled Veteran plates, the veteran may have up to two specialty plates with no registration fees, paying only the special registration plate fee (Form MVD-10353).
• The Department of Veterans Services says a veteran entitled to a veteran exemption who doesn’t have enough real or personal property to use the full property tax exemption may pay motor vehicle registration fees at two-thirds of the rates.