What's happening
This bill expands the definition of "income" for New York's school tax relief exemption to exclude certain retirement account distributions.
Why it matters
Expanding the list of retirement accounts whose distributions are excluded from "income". means more retirees could qualify for New York’s STAR property tax exemption, potentially reducing their school tax bills.
Including 401(k), 403(b), and SEP plan distributions (not just IRAs and annuities) recognizes how retirement savings have diversified. , making the exemption rules more fair and relevant for today’s retirees.
Lowering taxable “income” for STAR eligibility could help aging New Yorkers stay in their homes longer. , since more people living on retirement savings won’t be penalized for drawing from certain types of accounts.
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Who cares
Headline styles
Broaden School Tax Income Definition
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Recommitted to rules
- Ordered to third reading cal.1821
- Reported and committed to rules
- Reported and committed to finance
- Referred to aging
- Returned to senate
- Died in assembly
- Referred to real property taxation
- Delivered to assembly
- Passed senateVote 62–0
- Advanced to third reading
- 2nd report cal.
Show 2 earlier actions
- 1st report cal.1100
- Referred to aging
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Change School Tax Income Rules
In Assembly Committee · Real Property Taxation · Sponsor Steven Englebright
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2568
2017-2018 Regular Sessions
IN SENATE
January 13, 2017
Introduced by Sen. HELMING -- read twice and ordered printed, and when printed to be committed to the Committee on Aging
AN ACT to amend the real property tax law, in relation to the term "income" for purposes of the school tax relief exemption
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subparagraph (ii) of paragraph (b) of subdivision 4 of section 425 of the real property tax law, as amended by section 3 of part E of chapter 83 of the laws of 2002, is amended to read as follows:
(ii) The term "income" as used herein shall mean the "adjusted gross income" for federal income tax purposes as reported on the applicant's federal or state income tax return for the applicable income tax year, subject to any subsequent amendments or revisions, reduced by distributions, to the extent included in federal adjusted gross income, received from an individual retirement account [and], an individual retirement annuity, a distribution from an account established under section 401(k) or 403(b) of the United States internal revenue code of 1986 as amended, or a simplified employee pension plan (SEP) established pursuant to the United States internal revenue code of 1986 as amended; provided that if no such return was filed for the applicable income tax year, "income" shall mean the adjusted gross income that would have been so reported if such a return had been filed.
§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08229-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property tax law, in relation to the term "income" for purposes of the school tax relief exemption
Purpose
To expand the categories of retirement income which are not included in the income calculation for purposes of qualifying for the STAR exemption.
Summary of provisions
Section 1: Amends subparagraph 2 of paragraph b, subdivision 4 of section 425 of the real property tax law excluding from the income calculation a distribution from an account established under section 401-K or 403-B of the United States Internal Revenue Code of 1986 as amended or a simplified employee pension plan established pursuant to the United States Internal Revenue Code of 1986 as amended.
Justification
When the STAR real property tax relief law was introduced, the calculation of adjusted gross income for qualification allowed an individual to exempt their distribution from an individual retirement account. However, distributions from other tax qualified accounts under the Internal Revenue Code were not excluded. Consequently, many individuals who have saved substantial amounts of money in individual retirement accounts are allowed to exclude distributions those while individuals who may have saved in plans established under section 401K, 403-8, etc., are required to include those distributions in their calculation of income. In some circumstances, this statutory scheme has an unfair impact on individuals who have saved under particular retirement accounts at the expense of those who saved under other types of retirement accounts.
Prior legislative history
S.7472 of 2014, S.4595 of 2015/2016
Fiscal implications
To be determined
Effective date
This act shall take effect January 1, following the date upon which it becomes law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.