BILL NUMBER: S5113
SPONSOR: BORRELLO
 
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

Statutes affected:
S5113: 612 tax law, 612(c) tax law