The bill amends the New Mexico income tax law to remove the cap on the exemption for armed forces retirement pay. Previously, individuals could claim an exemption of up to $30,000 of their retirement pay; however, the new language allows armed forces retirees and their surviving spouses to claim an exemption for the full amount of their retirement pay that is includable in net income. This change aims to provide greater financial relief to veterans and their families.

The provisions of this act will take effect for taxable years beginning on or after January 1, 2026, ensuring that the updated exemption applies to future tax filings. The bill defines "armed forces retiree" as a former member of the U.S. armed forces who has qualified for retirement benefits through years of service or disability.

Statutes affected:
introduced version: 7-2-5.13