New Mexico Eliminates Social Security Taxes for Many Seniors

"New Mexicans, like all Americans, are feeling the pressure of rising costs," said Grisham in the statement. "Coupled with the state's robust current financial situation, there is no reason we shouldn't be taking every action to cut costs for New Mexico seniors, families and businesses."

New Mexico is one of 12 states that tax Social Security at some level. In late 2021, North Dakota eliminated the tax on Social Security benefits.

"This is meaningful tax relief that will put an average of $710 a year back in the pockets of 115,000 low and middle class seniors across New Mexico," Fred Nathan Jr., founder and executive director of Think New Mexico, told ThinkAdvisor in an email.

Sen. Michael Padilla of Albuquerque, a co-sponsor of the bill, told the Las Cruces Sun News when the bill passed the Legislature that with 49% of New Mexico's foster children being raised by retired grandparents, the money lost to state coffers would be converted to spendable income for the greater benefit of the economy.

The bill is part of about $400 million in tax cuts to state residents and businesses.