This bill amends Section 7-2-5.13 of the New Mexico Income Tax law to remove the existing limit on the amount of income tax exemption for armed forces retirement pay. Previously, individuals could claim an exemption of up to thirty thousand dollars ($30,000) of their retirement pay. The new language allows armed forces retirees or their surviving spouses to claim an exemption for the full amount of the retiree's armed forces retirement pay that is includable in net income, effectively eliminating the cap on the exemption.

The changes will take effect for taxable years beginning on or after January 1, 2026. This amendment aims to provide greater financial relief to armed forces retirees and their families by allowing them to retain more of their retirement income without being subject to state income tax limitations.

Statutes affected:
introduced version: 7-2-5.13