- NMERB benefits are subject to federal and New Mexico income tax, except contributions you already paid tax on. NMERB withholds if you ask and sends a 1099-R each year.Member Handbook 2025, pp. 22-23, Taxes, Other Deductions
- Check with NMERBNew Mexico has no exemption just for teacher pensions. Taxpayers 65 or older can exempt up to $8,000 each, phasing out at federal AGI over $51,000 (joint) or $28,500 (single). Social Security is exempt up to AGI of $100,000 (single) or $150,000 (joint). These are the tax-year 2025 rules.Tax-year 2025 only; later years not checked.NM Taxation and Revenue Department, 2025 PIT-ADJ Instructions, Lines 13 and 25, Tables 1 and 2
Federal and state tax
NMERB benefits are subject to federal and state income tax, except contributions already taxed (before July 1983 and after-tax service purchases). NMERB withholds on request and issues Form 1099-R each year. Member Handbook 2025, pp. 22-23, Taxes, Other Deductions
Federal required minimum distribution rules apply; missing one can bring a 50% federal excise tax. Member Handbook 2025, p. 9, Required Minimum Distribution (If you've left NMERB work, see leaving teaching.)
No pension exemption Check with NMERB
The 2025 PIT-ADJ instructions list no exemption specific to NMERB or other public pensions (the retirement-pay exemptions shown are for armed forces retirees and income from Indian-country employment of enrolled tribal members). NM Taxation and Revenue Department, 2025 PIT-ADJ Instructions, Lines 13, 24 and 25; 2025 PIT-1 Instructions
The age-65 exemption
Taxpayers 65 or older (or blind) may exempt up to $8,000 each, phasing down with federal AGI to $0 above $51,000 (married joint / head of household / surviving spouse), $28,500 (single) or $25,500 (married separately). NM Taxation and Revenue Department, 2025 PIT-ADJ Instructions, p. ADJ-4, Line 13; Table 1 (PDF p. 5)
| Exemption each | Joint, HoH | Single | Separate |
|---|---|---|---|
| $8,000 | $30,000 | $18,000 | $15,000 |
| $7,000 | $33,000 | $19,500 | $16,500 |
| $6,000 | $36,000 | $21,000 | $18,000 |
| $5,000 | $39,000 | $22,500 | $19,500 |
| $4,000 | $42,000 | $24,000 | $21,000 |
| $3,000 | $45,000 | $25,500 | $22,500 |
| $2,000 | $48,000 | $27,000 | $24,000 |
| $1,000 | $51,000 | $28,500 | $25,500 |
Federal AGI not over the amount shown. Above the last row the exemption is $0. HoH: head of household or surviving spouse. Tax year 2025. NM Taxation and Revenue Department, 2025 PIT-ADJ Instructions, p. ADJ-4, Line 13; Table 1 (PDF p. 5)
The Social Security exemption
Social Security income included in AGI is exempt when federal AGI does not exceed $100,000 (single), $75,000 (married separately) or $150,000 (joint, head of household, surviving spouse). NM Taxation and Revenue Department, 2025 PIT-ADJ Instructions, Line 25, Table 2
We have New Mexico's tax-year 2025 rules only. The instructions don't say whether the age-65 exemption amounts rise with inflation or change after 2025.
What would settle it: The tax-year 2026 PIT-ADJ instructions.
This site doesn't work out your tax. See Social Security, or estimate the pension itself with the calculator.
Questions
Does New Mexico tax NMERB pensions?
Yes. NMERB benefits are subject to federal and state income tax, except contributions already taxed (before July 1983 and after-tax service purchases). NMERB withholds on request and issues Form 1099-R each year. The 2025 PIT-ADJ instructions list no exemption specific to NMERB or other public pensions (the retirement-pay exemptions shown are for armed forces retirees and income from Indian-country employment of enrolled tribal members).
Is there a New Mexico tax break for retirees 65 and older?
Taxpayers 65 or older (or blind) may exempt up to $8,000 each, phasing down with federal AGI to $0 above $51,000 (married joint / head of household / surviving spouse), $28,500 (single) or $25,500 (married separately).
Is Social Security taxed in New Mexico?
Social Security income included in AGI is exempt when federal AGI does not exceed $100,000 (single), $75,000 (married separately) or $150,000 (joint, head of household, surviving spouse).
Source: NMERB Member Handbook, 2025 edition, pp. 9, 22-23. Also: NM Taxation and Revenue Department 2025 PIT-ADJ instructions; Table 1 (PDF p. 5; NM Taxation and Revenue Department 2025 PIT-1 instructions. Last reviewed .