Gallahan, Durso, Brown E, Gandolfo, Walsh, DeStefano, Gray, Maher, Angelino, Brabenec, Blankenbush,
Tague, Bendett, Beephan, Hawley, Brown K, Jensen, Miller, Morinello, Smullen, McDonough,
Chludzinski, Molitor, Lemondes, Ra
MLTSPNSR
Amd §612, Tax L
Includes retirement plans in the exemption for pensions and annuities for certain persons; increases such exemption to one hundred thousand dollars as adjusted by the consumer price index annually.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2017
SPONSOR: Slater TITLE OF BILL:
An act to amend the tax law, in relation to including retirement plans
in the exemption for pensions and annuities for certain persons and to
increasing such exemption
PURPOSE OR GENERAL IDEA OF BILL:
Includes retirement plans in the exemption for pensions and annuities
for certain persons and increases such exemption
SUMMARY OF PROVISIONS:
Expands the tax exemptions for pensions and annuities to other retire-
ment plans and increases the exemption from twenty thousand dollars to
forty thousand in 2025, sixty thousand in 2026, eighty thousand in 2027,
and one hundred thousand in 2028. Indexes future increases to the
consumer price index.
JUSTIFICATION:
Currently, the limit on retirement plan tax exemptions is twenty thou-
sand dollars, a limit that was set in 1981 and has not increased since.
Due to various economic factors such as inflation and the cost of
living, that twenty thousand dollars is not worth the same amount today
as it was in 1981. This bill aims to rectify that and allow our older
New Yorkers to keep more of their income when at a point in their life
they are likely living off of a fixed income that comes from their
retirement plans.
Increasing this exemption is not a new and untested idea, New Jersey for
example, already has their tax exemption limit set to one hundred thou-
sand dollars. Several other states also have a higher limit than New
York currently does while also having a lower cost of living. New York
needs to increase its current limit.
Additionally, older New Yorkers would not need to stay in the workforce
longer than they want or need to or be forced to return to the workforce
in order to supplement their income. Furthermore, reducing the tax
burden on our aging population will help encourage them to remain in New
York, closer to their families.
PRIOR LEGISLATIVE HISTORY:
2023-24: A.7973
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined
EFFECTIVE DATE:
Immediately
STATE OF NEW YORK
________________________________________________________________________
2017
2025-2026 Regular Sessions
IN ASSEMBLY
January 14, 2025
___________
Introduced by M. of A. SLATER, GALLAHAN, DURSO, E. BROWN, GANDOLFO,
WALSH, DeSTEFANO, GRAY, MAHER, ANGELINO, BRABENEC, BLANKENBUSH, TAGUE,
BENDETT, BEEPHAN, HAWLEY, K. BROWN, JENSEN, MILLER -- read once and
referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to including retirement plans
in the exemption for pensions and annuities for certain persons and to
increasing such exemption
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 3-a of subsection (c) of section 612 of the tax
2 law, as amended by section 3 of part I of chapter 59 of the laws of
3 2015, is amended to read as follows:
4 (3-a) Pensions [and], annuities and other retirement plans received by
5 an individual who has attained the age of fifty-nine and one-half, not
6 otherwise excluded pursuant to paragraph three of this subsection, to
7 the extent includible in gross income for federal income tax purposes,
8 but not in excess of [twenty] forty thousand dollars for any taxable
9 year beginning on or after January first, two thousand twenty-seven,
10 sixty thousand dollars for any taxable year beginning on or after
11 January first, two thousand twenty-eight, eighty thousand dollars for
12 any taxable year beginning on or after January first, two thou-
13 sand twenty-nine, one hundred thousand dollars for any taxable year
14 beginning on or after January first, two thousand thirty, multiplied by
15 one plus the percentage by which the consumer price index for the
16 preceding calendar year exceeds the consumer price index for the taxable
17 year beginning on or after January first, two thousand thirty, which are
18 periodic payments attributable to personal services performed by such
19 individual prior to [his] their retirement from employment, which arise
20 (i) from an employer-employee relationship or (ii) from contributions to
21 a retirement plan which are deductible for federal income tax purposes.
22 However, the term "pensions and annuities" shall also include distrib-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05032-01-5
A. 2017 2
1 utions received by an individual who has attained the age of fifty-nine
2 and one-half from an individual retirement account or an individual
3 retirement annuity, as defined in section four hundred eight of the
4 internal revenue code, and distributions received by an individual who
5 has attained the age of fifty-nine and one-half from self-employed indi-
6 vidual and owner-employee retirement plans which qualify under section
7 four hundred one of the internal revenue code, whether or not the
8 payments are periodic in nature. Nevertheless, the term "pensions and
9 annuities" shall not include any lump sum distribution, as defined in
10 subparagraph (D) of paragraph four of subsection (e) of section four
11 hundred two of the internal revenue code and taxed under section six
12 hundred three of this article. Where [a husband and wife] spouses file a
13 joint state personal income tax return, the modification provided for in
14 this paragraph shall be computed as if they were filing separate state
15 personal income tax returns. Where a payment would otherwise come within
16 the meaning of the term "pensions and annuities" as set forth in this
17 paragraph, except that such individual is deceased, such payment shall,
18 nevertheless, be treated as a pension or annuity for purposes of this
19 paragraph if such payment is received by such individual's beneficiary.
20 For purposes of this paragraph, "consumer price index" means the average
21 of the consumer price index as of the close of the twelve-month period
22 ending on August thirty-first of such taxable year for all-urban consum-
23 ers published by the United States department of labor.
24 § 2. This act shall take effect immediately.
