What's happening
This bill makes the first $100,000 of an individual's private pension income non-taxable under New York State law.
Why it matters
Substantially increases tax relief for retirees. By raising the exemption on private pension income from $20,000 to $100,000 per individual, the bill significantly reduces the state tax burden for many retirees, allowing them to keep more of their retirement income.
Removes age restrictions for the exemption. The proposal eliminates the requirement that individuals must be at least 59½ years old to qualify, making the tax benefit available to younger retirees or beneficiaries who inherit pension distributions.
May influence retirement decisions and residency. The expanded exemption could incentivize New Yorkers to retire within the state rather than relocate to states with more favorable tax treatment of retirement income, potentially impacting the state’s demographics and economy.
Potentially reduces state tax revenue. By exempting a larger portion of pension income, the bill could lead to a noticeable decrease in New York State’s income tax collections, which may affect funding for state programs or require adjustments elsewhere in the budget.
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Who cares
Private pension recipients
The bill would raise the state income tax exclusion for qualifying pension and annuity income from $20,000 to $100,000.
Retirees younger than 59½
The bill would remove the minimum age requirement for the exclusion on qualifying pension and annuity payments.
IRA holders and self-employed retirement plan participants
The bill would delete language expressly including their distributions in the exclusion, whether or not payments are periodic.
Married pension recipients filing jointly
The bill would retain separate computation of the exclusion for each spouse, applying the higher limit individually.
Headline styles
Make $100K Pension Tax-Free
Plain English, a few words. Used as the page title.
Sponsors
8 Co-sponsors
3 Multi-sponsors
History
- Held for consideration in ways and means
- Referred to ways and means
- Referred to ways and means
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4431
2017-2018 Regular Sessions
IN ASSEMBLY
February 2, 2017
Introduced by M. of A. KOLB, McDONOUGH, FINCH, FRIEND -- Multi-Sponsored by -- M. of A. BARCLAY, THIELE, WALTER -- read once and referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to making the first one hundred thousand dollars of an individuals' private pension non-taxable
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph 3-a of subsection (c) of section 612 of the tax law, as amended by section 3 of part I of chapter 59 of the laws of 2015, is amended to read as follows:
(3-a) Pensions and annuities received by an individual [who has attained the age of fifty-nine and one-half], not otherwise excluded pursuant to paragraph three of this subsection, to the extent includible in gross income for federal income tax purposes, but not in excess of [twenty] one hundred thousand dollars, which are periodic payments attributable to personal services performed by such individual prior to his retirement from employment, which arise (i) from an employer-employee relationship or (ii) from contributions to a retirement plan which are deductible for federal income tax purposes. [However, the term "pensions and annuities" shall also include distributions received by an individual who has attained the age of fifty-nine and one-half from an individual retirement account or an individual retirement annuity, as defined in section four hundred eight of the internal revenue code, and distributions received by an individual who has attained the age of fifty-nine and one-half from self-employed individual and owner-employee retirement plans which qualify under section four hundred one of the internal revenue code, whether or not the payments are periodic in nature. Nevertheless, the] The term "pensions and annuities" shall not include any lump sum distribution, as defined in subparagraph [(D)] (A) of paragraph four of subsection (e) of section four hundred two of the internal revenue code and taxed under section six hundred three of this
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03238-01-7
A. 4431 2
article. Where a husband and wife file a joint state personal income tax return, the modification provided for in this paragraph shall be computed as if they were filing separate state personal income tax returns. Where a payment would otherwise come within the meaning of the term "pensions and annuities" as set forth in this paragraph, except that such individual is deceased, such payment shall, nevertheless, be treated as a pension or annuity for purposes of this paragraph if such payment is received by such individual's beneficiary.
§ 2. This act shall take effect immediately and shall be deemed to have been in full force and effect on and after the first of January of the year in which it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.