Military Pay
Resident - Active duty military income is excluded from taxation in New Mexico. To subtract active duty military income in the New Mexico in TaxSlayer Pro, from the New Mexico Resident Return menu select:
- Subtractions from Federal AGI
- Military Income - Enter the military income as a positive number.
Nonresident - If the taxpayer is a nonresident of New Mexico stationed in New Mexico whose only source of income is active duty military pay, they are not required to file a New Mexico return.
One spouse is a resident of New Mexico and the other is not - A servicemember’s spouse may elect, for income tax purposes, to use the same state of residence as the servicemember. If a servicemember is not a New Mexico resident, and is instead a resident of another state, his or her spouse can elect to also be a resident of that state and not a resident of New Mexico.
New Mexico does not permit a different filing status from the federal return. If one spouse is a resident and one spouse is not, the resident spouse should file a nonresident New Mexico return.
Spouse Income - Military Spouses Residency Relief Act (MSRRA)
The MSRRA allows military spouses who reside with their service member spouse stationed in a nonresident state on military orders to keep their resident state for tax purposes. This means if the spouse has income from the nonresident state, they are not required to pay taxes to the nonresident state but report this income on their resident state return.
In order to be eligible for the income exemption under the MSRRA in New Mexico, the following conditions must be met by the military spouse/employee:
- The servicemember must have declared domicile in another state.
- The servicemember must be in the state in compliance with military orders.
- The servicemember’s New Mexico resident spouse must be in the state in which they currently reside solely to be with their spouse.
If the military spouse meets the eligibility requirements, they can avoid New Mexico state tax. To reduce or eliminate withholding on such wages, taxpayers should indicate this on their federal Form W-4 for New Mexico withholding tax.
To claim a refund of taxes withheld from the New Mexico income in error in TaxSlayer Pro, from the New Mexico Nonresident Return menu select:
- Net New Mexico Income Tax
- Apportionment (PIT-B)
- Allocation Information
- Military Spouses Residency Relief Act (Spouse) - Answer applicable questions.
- Wages, Salaries, Tips, etc. - Bypass the federal wages menu.
- Adjustments to State Wages (+/-) - Enter the qualified spouse wages as a negative number.
Note: This is an article on reporting military pay and military spouse pay in the TaxSlayer Pro program. It is not intended as tax advice.
Additional Information:
New Mexico State Tax Information
New Mexico Tax & Revenue: Personal Income Tax Overview
New Mexico Tax & Revenue: Personal Income Tax Forms
New Mexico Tax & Revenue: Individual Withholding Tax
While TaxSlayer Pro strives to make the information and links contained on this page as timely and accurate as possible, TaxSlayer Pro makes no promise or guarantee about the timeliness, accuracy or completeness of the contents of this page. The information contained on this page is for general information and is not intended to be tax advice. The user is also encouraged to review the underlying state resources and publications.