Bill S1661-2013

Increases the tax exemption for pensions and annuities for persons age fifty-nine and one half or greater

Increases the tax exemption for pensions and annuities for persons age fifty-nine and one half or greater from $20,000 to $50,000.

Details

Actions

  • Jan 8, 2014: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Jan 9, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Memo

BILL NUMBER:S1661

TITLE OF BILL: An act to amend the tax law, in relation to increasing the exemption for pensions and annuities for certain persons

TITLE OF BILL: An act to amend the tax law, in relation to increasing the exemption for pensions and annuities for certain persons

PURPOSE OR GENERAL IDEA OF BILL: To ensure that the tax law regarding pensions and annuities is current and reflects a more realistic exemption by raising the ceiling from the first twenty-thousand to fifty- thousand dollars to be tax exempt.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends section 612, paragraph 3-a of sub-section (c) of the tax law by omitting twenty and adding fifty pensions and annuities received by an individual who has attained the age of fifty-nine and one-half, to the extent includible in gross income not in excess of fifty thousand dollars. Specifically periodic payments that come from a contribution to an employment based retirement plan or an individual annuity plan which are deductible for federal income tax purposes.

JUSTIFICATION: This bill would update an antiquated tax ceiling established in 1981. Since the enactment of this law the average Cost of Living Allowance (COLA) increase to Social Security payments has been approximately 3 percent, according to the Bureau of Labor and statistics and the Consumer price Index for Urban Wage Earners and Clerical workers (CPI-W).

In the past several years many citizens have, out of necessity, had to work past minimum retirement age in order to maintain their income level and increase their retirement benefits. This bill will not only modernize cur tax code but allow retirement age citizens collecting these payments to be more fiscally solvent and improve their quality of life.

PRIOR LEGISLATIVE HISTORY: S. 6317 of 2011-12; referred to Investigations and Government Operations

FISCAL IMPLICATIONS: To be determined.

EFFECTIVE DATE: This act shall take effect immediately and shall be deemed to have been in full force and effect on and after the first of January of the year in which it shall have become law.


Text

STATE OF NEW YORK ________________________________________________________________________ 1661 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________
Introduced by Sen. GRISANTI -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to increasing the exemption for pensions and annuities for certain persons THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 3-a of subsection (c) of section 612 of the tax law, as amended by chapter 760 of the laws of 1992, is amended to read as follows: (3-a) Pensions and annuities received by an individual who has attained the age of fifty-nine and one-half, not otherwise excluded pursuant to paragraph three of this subsection, to the extent includible in gross income for federal income tax purposes, but not in excess of [twenty] FIFTY thousand dollars, which are periodic payments attribut- able to personal services performed by such individual prior to his retirement from employment, which arise (i) from an employer-employee relationship or (ii) from contributions to a retirement plan which are deductible for federal income tax purposes. However, the term "pensions and annuities" shall also include distributions received by an individ- ual who has attained the age of fifty-nine and one-half from an individ- ual retirement account or an individual retirement annuity, as defined in section four hundred eight of the internal revenue code, and distrib- utions received by an individual who has attained the age of fifty-nine and one-half from self-employed individual and owner-employee retirement plans which qualify under section four hundred one of the internal revenue code, whether or not the payments are periodic in nature. Never- theless, the term "pensions and annuities" shall not include any lump sum distribution, as defined in subparagraph (A) of paragraph four of subsection (e) of section four hundred two of the internal revenue code
and taxed under section six hundred three of this article. Where a husband and wife file a joint state personal income tax return, the modification provided for in this paragraph shall be computed as if they were filing separate state personal income tax returns. Where a payment would otherwise come within the meaning of the term "pensions and annui- ties" as set forth in this paragraph, except that such individual is deceased, such payment shall, nevertheless, be treated as a pension or annuity for purposes of this paragraph if such payment is received by such individual's beneficiary. S 2. This act shall take effect immediately and shall be deemed to have been in full force and effect on and after the first of January of the year in which it shall have become a law.

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