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Who cares
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Sponsors
Senator · Senate District 57
No co-sponsors yet.
History
- Referred to investigations and government operations
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S7333
Title of bill
An act to amend the tax law, in relation to establishing a personal income tax deduction for certain withdrawals from a 401(k) plan by a taxpayer suffering from a terminal illness
Purpose or general idea of bill
This bill grants a personal income tax deduction to taxpayers with a terminal illness who withdraw up to 20,000 from their 401(k) account on a hardship basis.
Summary of specific provisions
Section 1 adds a new paragraph 42 to subsection c of section 612 of the tax law to provide that hardship distributions from a retirement account established pursuant to section 401 (K) of the internal revenue code shall be exempt from New York state tax, to the extent includable in federal adjusted gross income, up to a maximum of $20,000. The exemption shall only be available to those who have a medically terminable condition which can be expected to result in death within a period of not more than 12 months.
Justification
Federal law governs the granting of 401(k) hardship withdrawals. This bill will assist those who are facing a life ending crisis who have proven their hardship case for a withdraw of 401 (k) funds on a hardship basis in accordance with federal regulations applicable to such plans. It is unfair to subject terminally ill individuals to state income taxes when they have proven it necessary to have access to these funds. These funds are often needed to pay medical bills and other expenses which accrue when a person faces the challenges associated with a terminal illness. The situation can be magnified when the individual is no longer able to continue in an employment situation. It is only equitable that New York forgoes taxation on monies that an individual has earned which become necessary for he or she to confront medical and personal challenges.
Prior legislative history
New Bill
Fiscal implications
Undetermined.
Effective date
This act shall take effect immediately and shall apply to all subsequent taxable years.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.