Military Pay
ResidentA - ctive duty military income is excluded from taxation in New Mexico. To subtract active duty military income in the New Mexico individual return, from the New Mexico resident tax return menu select:
- Deductions from Income
- Enter the amount of military wages included on your federal return - 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 from being withheld from their pay by providing their employer with New Mexico Military Spouse Withholding Tax Exemption Statement.
To claim a refund of taxes withheld from the New Mexico income in error, from the New Mexico nonresident return select:
- Basic Information
- Military Service Members Spouse Qualifying for Relief - Select Yes.
- Additions to Income
- NM Allocation and Apportionment of Income (PIT-B)
- Allocation of Wages
- Qualifying Non-resident Military Service member spouse income that is eligible to be excluded from Column B of the PIT-B - Enter qualifying spouse wages as a positive number.
Note: This is an article on reporting military pay and military spouse pay in TaxSlayer ProWeb. It is not intended as tax advice.
Additional Information: