Native American Veteran Personal Income Tax Claims
Eligible Native Americans who had income tax withheld from their military income may receive income tax settlements in certain situations (Sections 7-2H-1 through 7-2H-4 NMSA 1978). Such settlements come into question for Native American veterans who resided on tribal lands during their periods of active military service. They may have been exempt from paying state personal income taxes on their military income, but state personal income taxes may have been improperly withheld from their military income.
Before this law passed, many Native American veterans were barred by the statute of limitations from claiming refunds of these withholdings. The law creates a Native American Veterans’ Income Tax Settlement Fund. The money in the fund is used by the Taxation and Revenue Department to make settlement payments to certain Native American veterans who had state personal income taxes withheld from their military pay.