The bill amends Section 7-2-5.13 of the New Mexico Statutes to remove the previous limitation on the income tax exemption for armed forces retirement pay. Specifically, it eliminates the fixed exemption amount of thirty thousand dollars ($30,000) and instead 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.

This change aims to provide greater financial relief to armed forces retirees by ensuring that their entire retirement pay is exempt from state income tax. The new provisions will take effect for taxable years beginning on or after January 1, 2026.

Statutes affected:
introduced version: 7-2-5.13