The following is excerpted from the instructions for the 2007 New Mexico Tax Form PIT-ADJ:

Income of an Indian

If you or your spouse, or both, were enrolled members of a federally recognized New Mexico Indian nation, tribe, band or pueblo, your income is exempt from base income IF:

- You lived on the land of the Indian nation,  tribe,  band  or  pueblo  of membership when you  earned it, and

- You  earned  that  income  on  the lands of that nation, tribe, band or pueblo. 

You must meet both conditions. CAUTION:  Income earned  off  the lands  of  your  own  or  your  spouse’s 
nation, tribe, band or pueblo is subject to New Mexico income tax no matter where you live.

Military pay of an enrolled member is exempt only for times when the home of  record  is  on  the member’s  own Indian  nation,  tribe,  band  or  pueblo lands. Retirement or pension  income  is exempt only when the retirement or pension is the result of employment on the member’s Indian nation, tribe, band or pueblo. Retirement or pension income from employment off the lands of the nation, tribe, band or pueblo may not 
be deducted.

Enter the amount of qualifying income on line 9. Enter the name of your and your  spouse’s  (if  applicable)  nation, tribe,  band  or  pueblo  in  the  space provided. A  person may  not  claim  combined exemptions and deductions  for more than 100% of income. You must also include the exemption or deduction of income when you claim  rebates and credits on Schedule PIT-RC.  Include your income in calculating modified gross income. See the instructions for Schedule PIT-RC.