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Sponsor's memo
BILL NUMBER:S6573
Title of bill
An act to amend the tax law, in relation to increasing a pension exemption
Purpose
This bill updates the law regarding pensions and annuities. It increases the amount that private-sector pensions and annuities are exempt from the Personal Income Tax to $75,000.
Summary of provisions
Section 1 amends paragraph 3-a of sub-section (c) of section 612 of the Tax Law. It increases to $75,000 the amount from pensions and annuities received by an individual who has attained the age of fifty-nine and one-half that can be excluded from the calculation of gross income. Specifically, the funds to be excluded must be periodic payments attributable to personal services performed by the individual prior to their retirement. The funds must come from an employer-employee relationship or from contributions to a retirement plan which are deductible for federal income tax purposes.
Section 2 provides that this act shall take effect on the first of January next succeeding.
Justification
This bill is necessary to update the tax ceiling for retirement income derived from pensions and annuities. The current law is out of date. It does not reflect the growth in retirement income that has occurred since its enactment in 1982. Since that time the Consumer Price index has increased by 135 percent.
Furthermore, this bill is necessary to ensure that the recipients of income received from private-sector pensions and annuities are treated in a similar fashion as the recipients of income received from public-sector or government pensions. Income from government pensions is exempt from the Personal Income Tax. Whereas, currently, only the first $20,000 of income from private-sector pensions and annuities is exempt from the Personal Income Tax. This bill seeks to level the playing field. It will treat the recipients of private-sector pensions and annuities in a more equitable fashion. This bill will exempt up to $75,000 of income that individuals receive from private-sector pensions and annuities from Personal Income Tax. It will allow those individuals to improve their quality of life and become more fiscally solvent. This bill will treat their retirement income in a more equitable fashion.
Legislative history
New Bill.
Fiscal implications
To be determined.
Effective date
This act shall take effect on the first of January next succeeding.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.