Military Retirement Pay Tax Exemption:
Under New Mexico House Bill 163, military retirees can claim a state income tax exemption on retirement pay in the following amounts:
- 2022: $10,000
- 2023: $20,000
- 2024–2026: $30,000
The Thrift Savings Plan (TSP) does not withhold state or local taxes, but distributions are reported on IRS Form 1099-R. All TSP withdrawals are subject to state taxes, and early withdrawals may result in higher tax rates.
Exemption for Active Duty Pay:
Active duty military pay earned by New Mexico residents serving in the U.S. Armed Forces is exempt from the state’s personal income tax.
Disability Retirement Pay:
Military Disability Retirement Pay—received as a pension, annuity, or similar allowance for injuries or illnesses linked to active service—is excluded from taxable income in New Mexico. This includes:
- Disability compensation and pensions paid to Veterans or their families
- Housing grants for wheelchair-adapted homes
- Grants for vehicles for Veterans who have lost vision or limb function
- Payments under dependent-care assistance programs
Dependency and Indemnity Compensation (DIC):
DIC payments from the VA, provided to eligible survivors of Service members who died in the line of duty or from a service-connected condition, are entirely tax-free.
Survivor Benefit Plan (SBP), Reserve Component Survivor Benefit Plan (RCSBP), and Retired Serviceman’s Family Protection Plan (RSFPP):
New Mexico taxes military survivor benefits, with exemptions only available for qualifying medical expenses, age, or low-to-moderate income levels—these apply to all residents, not just military families.
Property Tax Benefits:
- Veterans’ Property Tax Exemption: Eligible Veterans may receive a $4,000 reduction in the taxable value of real property.
- Disabled Veteran Property Tax Exemption: New Mexico residents with a 100% VA service-connected disability rating qualify for a full property tax waiver on their primary residence.
- Veterans’ Service Organization Exemption: Property owned by a U.S. Congress-chartered Veterans’ Service Organization, used primarily to aid Veterans and their families, is exempt from property taxes.
Vehicle Registration Fee Waiver:
Certain disabled Veterans are eligible for a registration fee exemption for one vehicle.
Business Tax Credit for Hiring Veterans:
Businesses in New Mexico can claim a tax credit of up to $1,000 for hiring a recently discharged Veteran.
Sales Tax:
- Statewide Rate: 4.88%
- County Add-on: Up to 2.726%
- Average Combined Rate: 7.72%
Recreation
New Mexico Recreational Benefits for Disabled Veterans
New Mexico provides a range of special recreational perks for qualified disabled Veterans, including:
- Free Annual State Park Day-Use Pass – Unlimited entry into all New Mexico state parks and recreation areas.
- Museum and Monument Access Pass – Unlimited admission to state-run museums and monuments.
- Three-Night Camping Pass – Complimentary camping for up to three nights at New Mexico State Parks each year.
Veterans Day Recreation Privileges
Each Veterans Day, New Mexico offers special benefits to resident active duty Service members, honorably discharged Veterans, and their immediate families:
- Free entry to any New Mexico State Park
- Waived campsite fees at state parks
- Complimentary admission to:
- New Mexico History Museum
- New Mexico Museum of Natural History and Science
- New Mexico Museum of Space History
Free Lifetime Hunting and Fishing Card for 100% Disabled Veterans
Eligible Veterans with a 100% service-connected disability can receive a free lifetime card covering small game, deer, and fishing privileges.
- Deer hunting licenses are issued only with a public-land deer draw or written landowner permission for private-land hunts.
- Applications for deer licenses must be submitted each year.
- Public-land draw preferences are not given.
- Required stamps must be purchased for activities not covered by the Disabled Veteran card.
Discounted Licenses for Disabled Veterans
- Small Game Hunting & Fishing License: New Mexico resident Veterans with a VA disability rating under 100% may purchase a small game hunting and fishing license for just $10.
- Reduced Fee Program: The New Mexico Department of Game and Fish (NMDGF) offers a 50% discount on all licenses, permits, and stamps for resident active duty Service members and honorably discharged Veterans.
Eligibility Requirements for Reduced Fee Licenses:
- Active Duty: Must have served at least 90 days on active duty and still be serving.
- Reserve Component: Must have served six continuous years and continue to serve.
- Veterans: Must have served at least 90 days active duty or six years in a reserve component, with an honorable discharge.
Special Hunting Opportunities for Veterans
- Once-in-a-Lifetime Oryx Hunt: Exclusively for New Mexico resident Veterans.
- Fort Bliss Resident Pricing: Active duty Service members stationed at Fort Bliss qualify for resident pricing on draw hunts occurring on New Mexico portions of Fort Bliss. Proof of assignment must be submitted annually.
Resident Pricing for Nonresident Disabled Service Members in Rehabilitation Programs
Nonresident active duty Service members or Veterans in a recognized rehabilitation program involving hunting may purchase resident-priced licenses for deer, elk, antelope, javelina, oryx, and turkey.
- The program must be sponsored by the federal government or an approved nonprofit.
- It must be run under the direction of a military or VA rehabilitation facility.
- This benefit is not available through the public draw. Proof of eligibility is required.
Free Fishing Licenses for Disabled Veterans in Rehabilitation Programs
Active duty Service members or Veterans participating in approved fishing rehabilitation programs may receive free fishing licenses.
- The program must be federally or nonprofit-sponsored and managed by a military or VA rehabilitation center.
- Habitat Management and Access Validation and Habitat Stamp requirements are waived.
- All other New Mexico fishing laws and regulations still apply.
Education Programs
New Mexico Education Benefits for Veterans, Service Members, and Families
Vietnam Veterans’ Scholarship
New Mexico offers a state-funded scholarship for resident undergraduate and graduate students who served in Vietnam. The award covers tuition, required fees, and a book allowance for one academic year. Recipients may renew the scholarship if they maintain satisfactory academic progress.
Wartime Veteran Scholarship
This state scholarship is available to resident undergraduate and graduate students who are wartime Veterans. It provides tuition, fees, and a book allowance for one academic year, with the option to renew for students in good academic standing.
In-State Tuition for Veterans, Spouses, and Dependents
Veterans, their spouses, and children using VA education benefits are entitled to in-state tuition rates at any publicly funded college, university, vocational school, or training program in New Mexico.
In-State Tuition for Nonresident Active Duty Members and Dependents
Active duty Service members and their dependents stationed in New Mexico qualify for in-state tuition, regardless of residency status.
- If the Service member is reassigned outside of New Mexico, dependents may continue to receive in-state tuition as long as they remain enrolled and in good standing at their school.
In-State Tuition for Dependents of Active Duty Members Stationed Outside New Mexico
Dependents of active duty or National Guard members serving on federal orders may also qualify for in-state tuition, even if their sponsor is not stationed in New Mexico. Federal education benefits are not required, but dependents must show intent to establish New Mexico residency by taking steps such as:
- Transferring a driver’s license to New Mexico
- Registering vehicles in New Mexico
- Registering to vote in New Mexico
In-State Tuition for New Mexico National Guard Members and Dependents
New Mexico National Guard Service members, along with their spouses and children, are eligible for in-state tuition at state-funded colleges, universities, vocational schools, and training programs.
Children of Deceased Veterans Scholarship
Children of Service members killed during armed conflict are eligible for a full tuition waiver covering tuition, fees, room, board, books, and supplies. Recipients also receive a $300 annual stipend.
New Mexico Lottery Scholarship Extension for Service Members
Resident Service members who enlist within four months of graduating from a New Mexico high school may delay using the New Mexico Legislative Lottery Scholarship until up to 16 months after discharge. An honorable discharge is required.
High School Diplomas for Wartime Veterans
Veterans who left a New Mexico high school early to serve during World War II, the Korean War, or the Vietnam War may be awarded a diploma from the high school they were attending.
Interstate Compact on Educational Opportunity for Military Children (MIC3)
New Mexico participates in the MIC3 agreement to help military children succeed academically despite frequent relocations and deployments. Key goals include:
- Quick enrollment without delays from record transfers or differing entrance requirements
- Fair student placement despite variations in schedules, grading, and course requirements
- Support for on-time graduation
- Coordination between states, schools, and families to ensure continuity
- Flexibility and collaboration between schools and parents to promote academic success
Purple Star Public School Program
Established in 2021, this program recognizes schools that demonstrate strong support for military-connected students and families.
To earn the Purple Star designation, a school must:
- Appoint a trained liaison to assist military families and educate staff on their unique needs
- Maintain a dedicated webpage with resources for military families
- Show a sustained commitment to helping military-connected students thrive academically and socially
Housing Benefits for Veterans in New Mexico
New Mexico State Veterans’ Home
The New Mexico State Veterans’ Home offers comprehensive nursing care in a supportive environment designed to enhance the physical, social, and emotional well-being of each resident. The facility focuses on delivering high-quality, continually improving care while encouraging residents to maintain independence and make choices that support their preferred lifestyle.
New Mexico State Veterans Home at Truth or Consequences
Eligibility for the New Mexico State Veterans’ Home
To be considered for admission, applicants must meet one or more of the following criteria:
- Veterans who have served at least 90 days in the U.S. Armed Forces and were honorably discharged
- Spouses of qualifying Veterans
- Gold Star Parents, whose child lost their life while on active duty in the U.S. Armed Forces
- Certain reserve component members who satisfy established legal residency requirements
While residency in New Mexico is not mandatory, priority is given to state residents if there is a waiting list for admission.
Employment and Job Training: Veterans Preference
Paid Military Training Leave for New Mexico Public Employees:
In New Mexico, all employees working for state, county, municipal, and school district offices, as well as other public entities, who serve in the National Guard or U.S. Armed Forces Reserves, are entitled to 15 days of paid military leave each federal fiscal year. This leave is granted in addition to regular vacation or personal leave and is specifically for periods when the service member is ordered to training duty. The governor also has the authority to approve an additional 15 days of paid leave if the training directly benefits the state by enhancing the employee’s ability to perform their job duties.
State Hiring Preference for Veterans:
New Mexico gives hiring priority to Veterans, National Guard members, and Disabled Veterans seeking public sector jobs. Qualified applicants who have been honorably discharged from the military or are currently serving in the National Guard receive an additional five points added to their final passing score on job-related examinations. Veterans with a verified service-connected disability are awarded 10 extra points.
Required Documentation:
- Veterans and Disabled Veterans: DD214 plus a disability determination letter.
- National Guard Members: Proof of current service such as an official statement or NGB Form 22.
New Mexico Department of Workforce Solutions – Veterans’ Services:
The Department prioritizes Veterans for employment support, training opportunities, career counseling, skills testing, job referrals, and development services. Local Veteran Employment Representatives (LVER) focus on building employer connections, organizing job search workshops, and providing employment guidance. Disabled Veterans Outreach Program (DVOP) Specialists concentrate on intensive services for disabled Veterans and those facing significant employment barriers.
Operation Soundstage:
A collaborative initiative between the New Mexico Film Office, Department of Veterans’ Services, and Department of Workforce Solutions, Operation Soundstage helps connect Veterans with employment and training in the state’s film and television industry.
Federal Employment – Veterans’ Preference:
Under federal law, Veterans—especially those with service-connected disabilities or who served during qualifying periods—receive hiring and retention preference in federal civil service positions. Points are added to examination or interview scores as follows:
- 5-Point Preference: Awarded to Veterans who served:
- During a declared war,
- Between April 28, 1952, and July 1, 1955,
- For more than 180 consecutive days (excluding training) between January 31, 1955, and October 15, 1976,
- In the Gulf War from August 2, 1990, to January 2, 1992,
- For over 180 days (excluding training) between September 11, 2001, and August 31, 2010, during Operation Iraqi Freedom, or
- In campaigns where a campaign medal was authorized, such as El Salvador, Lebanon, Grenada, Panama, Southwest Asia, Somalia, or Haiti.
- 10-Point Compensable Disability Preference (CP): For Veterans with a service-connected disability rating between 10% and 30%.
- 10-Point, 30%+ Disability Preference (CPS): For Veterans rated at 30% or more.
- 10-Point Disability Preference (XP): For Veterans receiving military or VA disability benefits or who have been awarded a Purple Heart.
- 10-Point Derived Preference (XP): For spouses, surviving spouses, or mothers of qualifying Veterans, under certain conditions, such as the Veteran being 100% disabled or unemployable.
Some eligibility rules, such as the 24-month continuous service requirement, may apply, though exceptions exist for those discharged due to service-connected disabilities, hardship, or specific statutory provisions.
USERRA – Employment and Reemployment Rights:
The Uniformed Services Employment and Reemployment Rights Act safeguards the civilian job rights of Veterans and reserve component members. This law ensures:
- Job Protection: Employees can be absent for up to five years for military duty and still retain reemployment rights, with exceptions for longer service under certain conditions.
- Disability Accommodation: Employers must make reasonable efforts to accommodate service-connected disabilities. Service members recovering from injuries have up to two years to return to work.
- Seniority and Benefits: Returning service members must be reinstated in the position they would have attained had they not left for military duty, with the same pay, benefits, and seniority.
- Training Support: Employers must provide training or retraining if necessary for the returning employee to qualify for their position.
- Health and Pension Coverage: Military members may continue employer-sponsored health coverage for up to 24 months during extended service, potentially at up to 102% of the premium cost. Pension benefits remain protected under the Act.
Eligibility for USERRA Protections:
Veterans, National Guard members, and U.S. Armed Forces Reservists who leave civilian employment for training or active duty qualify. The Department of Labor’s Veterans’ Employment and Training Service (VETS) assists with all claims, including those from federal and postal employees.
Burials and Memorials
Be sure to record your wishes regarding interment in a national cemetery and the use of a VA-provided headstone, and store this information with your personal documents and medical records.
The National Cemetery Administration (NCA) honors qualified Veterans and their loved ones by offering a dignified final resting place and a permanent memorial that reflects the Veteran’s service to the country.
Burial benefits include a plot in any open national cemetery with available space, grave opening and closing services, ongoing site maintenance, a government-issued headstone or marker, a burial flag, and a Presidential Memorial Certificate — all provided at no cost to the family. Certain Veterans may also qualify for a burial allowance. For those choosing cremation, the remains receive the same level of care and honors as traditional casketed burials, whether interred or inurned.
These benefits also cover eligible spouses and dependents, ensuring burial next to the Veteran and perpetual maintenance of the site. The spouse’s or dependent’s name, along with birth and death dates, will be engraved on the Veteran’s headstone without any cost to the family. Notably, spouses and eligible dependents may be laid to rest before the Veteran passes away, and their burial does not need to be in the same national cemetery as the Veteran.
National Cemeteries include:
Fort Bayard: Fort Bayard National Cemetery
Santa Fe: Santa Fe National Cemetery
New Mexico VA Benefit Resources
Veterans in New Mexico have access to a Regional Benefits Office as well as a VA Medical Center for their service-related needs.
New Mexico VA Regional Benefits Office
- Albuquerque: Albuquerque Regional Office
New Mexico VA Medical Centers
- Albuquerque: New Mexico VA Health Care System
Important Information on New Mexico Veteran Benefits
If you are a Veteran applying for VA benefits for the first time, you will need to provide a copy of your DD 214 (discharge document). This record includes details such as your discharge status, full legal name, Social Security number, branch of service, and the dates you served. In most cases, an honorable or general discharge qualifies a Veteran for the majority of VA benefits.
It’s essential to store your discharge paperwork and medical records securely in a location that is both safe from damage and easily accessible to you and your family. A locked safe is highly recommended to prevent loss, destruction, or tampering.
Eligibility for most VA benefits is determined by discharge from active duty under conditions other than dishonorable. Active duty refers to full-time service in the Army, Navy, Air Force, Marine Corps, or Coast Guard, or as a commissioned officer in the Public Health Service, Environmental Services Administration, or the National Oceanic and Atmospheric Administration.
A discharge classified as “Dishonorable” — particularly those resulting from a general court-martial for bad conduct — can disqualify a Veteran from VA benefits. However, certain benefits may still be available to Veterans who are incarcerated or on parole. VA Regional Offices can provide guidance for individuals in prison, parolees, or those with multiple discharges under varying conditions.
Information current as of November 2023.
New Mexico Veteran Benefits
Disabled Veterans in New Mexico with a VA disability rating of 90% or lower may be entitled to extra benefits. Vital Veterans Consultants offers a free, no-obligation consultation to review your claim and assess your eligibility for these additional benefits.
