Relates to the term "income" for purposes of the school tax relief exemption; adds 401(k) and 403(b) accounts to the list of eligible income deductions when determining Enhanced STAR eligibility.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1257
SPONSOR: Stirpe 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:
This legislation will add 401(k) and 403(b) accounts to the list of
eligible income deductions when determining Enhanced STAR eligibility.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1: amends Section 425 of the Real Property Tax Law by adding
accounts established under section 401(k) or 403(b) of the U.S. Inter-
nal Revenue Code, or a Simplified Employee Pension Plan (SEP) to the
definition of "adjusted gross income" for federal income tax purposes as
reported on the applicant's tax return.
Section 2: sets the effective date.
JUSTIFICATION:
Enhanced STAR exemptions for seniors aged 65 and older have a maximum
income of $86,000. However, the law currently allows for seniors to
reduce that income by taxable individual retirement accounts (IRAs) and
individual retirement annuities. There is a gap in the law and an inher-
ent unfairness to public employees, in that instead of IRAs, such
employees may contribute to tax deferred accounts such as
403(b)accounts. These are not currently eligible as income deductions
and will unfairly disadvantage seniors when they need to start withdraw-
ing required minimum distributions from their retirement accounts. This
legislation addresses that issue by amending the real property tax law
to allow seniors to reduce their total income by IRAs and 401(k),403(b);
or SEP accounts.
LEGISLATIVE HISTORY:
2018: A.9575-A - Referred to Property Taxation/ Passed Senate
2019: A.4087 - Referred to Property Taxation/ Referred to aging
2020: A.4087 - Referred to Property Taxation/ Referred to Aging
2022: A.9396/S.2570 - Referred to Property Taxation/ Referred to Aging
FISCAL IMPLICATIONS:
Undetermined.
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law.
STATE OF NEW YORK
________________________________________________________________________
1257
2023-2024 Regular Sessions
IN ASSEMBLY
January 13, 2023
___________
Introduced by M. of A. STIRPE, SEAWRIGHT, THIELE, MAGNARELLI, KELLES,
GUNTHER, HUNTER, ZEBROWSKI, SIMON, STECK, BRAUNSTEIN, DAVILA,
JEAN-PIERRE, ANGELINO, MIKULIN, GALLAHAN -- read once and referred to
the Committee on Real Property Taxation
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 Assem-bly, do enact as follows:
1 Section 1. Subparagraph (ii) of paragraph (b) of subdivision 4 of
2 section 425 of the real property tax law, as amended by section 1 of
3 part B of chapter 59 of the laws of 2018, is amended to read as follows:
4 (ii) The term "income" as used herein shall mean the "adjusted gross
5 income" for federal income tax purposes as reported on the applicant's
6 federal or state income tax return for the applicable income tax year,
7 subject to any subsequent amendments or revisions, reduced by distrib-
8 utions, to the extent included in federal adjusted gross income,
9 received from an individual retirement account [and], an individual
10 retirement annuity, a distribution from an account established under
11 section 401(k) or 403(b) of the United States internal revenue code of
12 1986 as amended, or a simplified employee pension plan (SEP) established
13 pursuant to the United States internal revenue code of 1986 as amended;
14 provided that if no such return was filed for the applicable income tax
15 year, "income" shall mean the adjusted gross income that would have been
16 so reported if such a return had been filed. Provided further, that
17 effective with exemption applications for final assessment rolls to be
18 completed in two thousand nineteen, where an income-eligibility determi-
19 nation is wholly or partly based upon the income of one or more individ-
20 uals who did not file a return for the applicable income tax year, then
21 in order for the application to be considered complete, each such indi-
22 vidual must file a statement with the department showing the source or
23 sources of his or her income for that income tax year, and the amount or
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00352-01-3
A. 1257 2
1 amounts thereof, that would have been reported on such a return if one
2 had been filed. Such statement shall be filed at such time, and in such
3 form and manner, as may be prescribed by the department, and shall be
4 subject to the secrecy provisions of the tax law to the same extent that
5 a personal income tax return would be. The department shall make such
6 forms and instructions available for the filing of such statements. The
7 local assessor shall upon the request of a taxpayer assist such taxpayer
8 in the filing of the statement with the department.
9 § 2. This act shall take effect on the first of January next succeed-
10 ing the date on which it shall have become a law.
