Do my wife and I pay NM State income tax on Education Retirement from NM and on Social Security earned while working in NM after moving to Texas? I am on Allocation page.

[Jimmy-Lee]

We were told by another retiree in our position that he still pays full NM State tax on retirement income even though he lives in Texas.  Is that correct. I am on the allocation page for filing NM State Tax.

[TomD8 · Accepted solution]

The Pension Source Tax Act of 1996 (P.L. 104-94) specifically stipulates that, "No State may impose an income tax on any retirement income of an individual who is not a resident or domiciliary of such State."

In other words, retirement income is taxable only by your state of residence at the time you receive it.