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.
STATE OF NEW YORK
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5113
2025-2026 Regular Sessions
IN SENATE
February 19, 2025
___________
Introduced by Sen. BORRELLO -- read twice and ordered printed, and when
printed to be committed to the Committee on Budget and Revenue
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-
23 utions received by an individual who has attained the age of fifty-nine
24 and one-half from an individual retirement account or an individual
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05032-01-5
S. 5113 2
1 retirement annuity, as defined in section four hundred eight of the
2 internal revenue code, and distributions received by an individual who
3 has attained the age of fifty-nine and one-half from self-employed indi-
4 vidual and owner-employee retirement plans which qualify under section
5 four hundred one of the internal revenue code, whether or not the
6 payments are periodic in nature. Nevertheless, the term "pensions and
7 annuities" shall not include any lump sum distribution, as defined in
8 subparagraph (D) of paragraph four of subsection (e) of section four
9 hundred two of the internal revenue code and taxed under section six
10 hundred three of this article. Where [a husband and wife] spouses file a
11 joint state personal income tax return, the modification provided for in
12 this paragraph shall be computed as if they were filing separate state
13 personal income tax returns. Where a payment would otherwise come within
14 the meaning of the term "pensions and annuities" as set forth in this
15 paragraph, except that such individual is deceased, such payment shall,
16 nevertheless, be treated as a pension or annuity for purposes of this
17 paragraph if such payment is received by such individual's beneficiary.
18 For purposes of this paragraph, "consumer price index" means the average
19 of the consumer price index as of the close of the twelve-month period
20 ending on August thirty-first of such taxable year for all-urban consum-
21 ers published by the United States department of labor.
22 § 2. This act shall take effect immediately.
