Information for retired persons

To determine if you are a New York State resident for income tax purposes, you must consider where your domicile was and where you maintained a permanent place of abode during the tax year.  For more information, see Income tax definitions and Frequently Asked Questions about filing requirements to determine your resident status.

Once you have determined your resident status, click on the corresponding link to learn which New York State return, if any, is required:

• Filing information for New York State residents
• Filing information for New York State part-year residents
• Filing information for New York State nonresidents

Note: If you are not required to file a New York State income tax return, you may still qualify to claim a refund of certain credits. For more information, see New York tax credits.

You may be eligible to file for free. For more information, see free file your income tax return.

Income you receive from certain types of pensions while you are a nonresident is not taxed by New York State and therefore should not be included in the New York State amount column on Form IT-203, Nonresident and Part-Year Resident Income Tax Return.

Examples of excluded pensions include:

• a simplified employee pension
• certain annuity plans and contracts
• certain individual retirement plans
• eligible deferred compensation plans
• certain governmental plans
• certain trusts

For a full definition of retirement income not taxable to a nonresident, see section 114 of Title 4 of the U.S. code.

If you receive pension income that is not described in section 114 of Title 4 of the U.S. code and that income is derived from a business, trade, profession, or occupation previously carried on in New York, it must be included in the New York State amount column of Form IT-203. However, you are entitled to the pension and annuity income exclusion of up to $20,000 if you meet the conditions.

Payers of annuities and pensions are not required to withhold New York State, New York City, and Yonkers income tax from pension or annuity payments. However, if your pension or annuity must be included in your New York adjusted gross income and is payable over a period longer than one year, you may request that the payer withhold New York State, New York City, and Yonkers income taxes.

For more information, see Form IT-2104-P, Annuitant’s Request for Income Tax Withholding.

If you choose, you may make quarterly payments of estimated income tax in addition to, or instead of, withholding. For more information, see Form IT‑2105, Estimated Tax Payment Voucher for Individuals.

Social security benefits that are included in federal adjusted gross income may be subtracted from your federal adjusted gross income when computing your New York adjusted gross income.

If you received a pension or other distribution from a New York State or local government pension plan or federal government pension plan, you may subtract the amount of distribution that was included in your federal adjusted gross income, regardless of your age or of the form the payment(s) take. 

This subtraction modification is allowed for a pension or distribution amount (to the extent the pension or other distribution was included in your federal adjusted gross income), including a distribution from a pension plan which represents a return of contribution in a year prior to retirement, as an officer, employee, or beneficiary of an officer or an employee of: 

• New York State, including the State and City Universities of New York and the New York State Education Department, who belongs to the Optional Retirement Program. Optional Retirement Program members may only subtract that portion attributable to employment with the State or City University of New York or the New York State Education Department.
• Certain public authorities, including: the Metropolitan Transportation Authority (MTA) Police 20-Year Retirement Program; the Manhattan and Bronx Surface Transit Operating Authority (MABSTOA); and the Long Island Railroad Company (LIRR).
• Local governments within the state, including, but not limited to:
  • New York State (NYS) Teachers’ Retirement System;
  • New York City (NYC) Teachers’ Retirement System;
  • NYC Teachers’ Retirement IRC 403(b) plan;
  • International Union of Operating Engineers Local 891 Annuity Fund (Department of Education of the NYC School District);
  • NYC Superior Officers’ Council Annuity Trust Fund;
  • NYC Correction Captains’ Association Annuity Fund;
  • NYC Detectives’ Endowment Association Annuity Fund;
  • City University of New York (CUNY) Civil Service Forum Annuity Fund;
  • Sergeants Benevolent Association of the City of New York Annuity Fund;
  • NYC variable supplemental funds (VSF), including:
    • Transit Police Officers’ VSF,
    • Transit Police Superior Officers’ VSF,
    • Housing Police Officers’ VSF,
    • Housing Police Superior Officers’ VSF,
    • Police Officers’ VSF,
    • Police Superior Officers’ VSF,
    • Firefighters’ VSF,
    • Fire Officers’ VSF,
    • Corrections Officers’ VSF,
    • Corrections Captain and Above VSF.
• The United States, its territories, possessions (or political subdivisions thereof), or any agency, instrumentality of the United States (including the military), or the District of Columbia.

Distributions received from a New York State or local pension plan or from a federal government pension plan as a nonemployee spouse in accordance with a court-issued qualified domestic relations order (QDRO) that meets the criteria of Internal Revenue Code (IRC) section 414(p)(1)(A) or in accordance with a domestic relations order (DRO) issued by a New York court retain their character as pension income. Therefore, if you receive distributions from a New York State or local pension plan or a federal government pension plan as the result of a DRO or QDRO, you are allowed the subtraction modification to the extent that the distributions are included in your federal adjusted gross income. 

If you were age 59½ or older for the entire tax year, you may exclude up to $20,000 of your qualified pension and annuity income from your federal adjusted gross income for purposes of determining your New York adjusted gross income. If you became age 59½ during the tax year, the exclusion is allowed only for the amount of pension and annuity income received on or after you became 59½, but not more than $20,000. 

Married taxpayers who both receive pension income are each entitled to a maximum pension and annuity income exclusion of $20,000 whether they file jointly or separately. However, you cannot claim any unused portion of your spouse’s exclusion. If you receive your own pension income and your deceased spouse’s pension income, you are entitled to a maximum pension and annuity exclusion of $20,000 each year.

The exclusion applies to pension and annuity income received by an estate or trust if the income meets the requirements of a qualified pension and annuity. For more information regarding pension and annuity income that qualify for this subtraction, see the instructions to Form IT-201 and IT-203.

If you are the recipient of distributions from a pension or annuity fund of a deceased individual you may be eligible for the subtraction modifications previously mentioned. 

Pensions of New York State, local governments, and the federal government

If you received pension and annuity income as the beneficiary of a deceased officer or employee of the United States, New York State, or local government within New York State, you may also make this subtraction to the extent that the distributions are included in your federal adjusted gross income.

Pension and annuity income exclusion

If you receive pension and annuity income of a deceased individual, you may take this subtraction (to the extent the distributions are included in your federal adjusted gross income), regardless of your age, if the deceased would have been entitled to it had the deceased continued to live. If the deceased individual would have become 59½ during the tax year, you may subtract from your federal adjusted gross income the amount of pension and annuity income received on or after the date that the deceased individual would have become 59½, but not more than $20,000. In addition, the amount of pension and annuity income exclusion attributable to the deceased individual that you are eligible to claim as a beneficiary for the tax year must first be reduced by the amount subtracted on the deceased individual’s New York State income tax return, if any, for the same tax year.

If the deceased individual has more than one beneficiary, the $20,000 maximum amount of the pension and annuity exclusion must be allocated among the beneficiaries. Each beneficiary’s share of the $20,000 exclusion is determined by multiplying $20,000 by a fraction whose numerator is the value of the pensions and annuities inherited by the beneficiary, and whose denominator is the total value inherited by all beneficiaries of the deceased individual’s pensions and annuities. The total exclusion of the deceased individual and all beneficiaries cannot exceed $20,000 annually.

Example 1: A decedent, who was age 65 at the time of death, received pension income of $9,000 during the tax year. Two beneficiaries inherited equal portions (50%) of the decedent’s pension during the same tax year and each beneficiary received a $7,000 distribution from the pension.

The decedent’s tax return filed for the year of death shows $9,000 of pension income included in the decedent’s federal adjusted gross income. Therefore, the decedent is allowed a pension exclusion of $9,000.

The beneficiaries must allocate the remaining pension exclusion of $11,000 ($20,000 – $9,000) in the same ratio (50%) as the total original inheritance is shared. Therefore, each beneficiary’s maximum pension exclusion attributable to the decedent’s pension is limited to $5,500 (50% X $11,000).

Example 2: Two beneficiaries receive an inheritance of a decedent’s IRA and pension. At the time of inheritance, the value of the IRA and the pension is $100,000 and $400,000 respectively. Beneficiary A inherited 50% of the decedent’s IRA ($50,000) and 75% of the pension account ($300,000) for a total of $350,000. Beneficiary B inherited 50% of the decedent’s IRA ($50,000) and 25% of the pension account ($100,000) for a total of $150,000.

The decedent would have been allowed the pension exclusion provided under the Tax Law if the decedent had continued to live. However, the decedent had not taken any distributions from the IRA or pension at the time of death. Regardless of the amount of the distribution each beneficiary takes each year, if any, the beneficiaries must allocate the maximum exclusion in the same ratio as the total original inheritance is shared so that the total exclusion of all beneficiaries does not exceed $20,000.

Beneficiary A’s maximum pension exclusion attributable to the decedent’s IRA and pension is limited to $14,000 annually, calculated as follows:

• $350,000/$500,000 = 70%
• 70% X $20,000 = $14,000

Beneficiary B’s maximum pension exclusion attributable to the decedent’s IRA and pension is limited to $6,000 annually, calculated as follows:

• $150,000/$500,000 = 30%
• 30% X $20,000 = $6,000

The maximum exclusion allowable, from the total of all sources that qualify for the exclusion, may not exceed $20,000.

Example 3: John, age 60, receives an annual pension distribution of $15,000 from his own pension. John is also the sole beneficiary of a decedent’s pension and receives a distribution of $25,000 from that pension. (The decedent was over age 59 ½ and would have been entitled to the pension and annuity income exclusion had the decedent continued to live. However, the decedent had not taken any pension distribution at the time of death.)

John includes the total $40,000 of pension distributions in his federal adjusted gross income for the tax year. The maximum pension and annuity income exclusion John is allowed for the tax year is $20,000.

If you have disability income that qualifies for the disability income exclusion and pension and annuity income that also qualifies for the exclusion, the total exclusion combined cannot exceed $20,000. See Form IT-221, Disability Income Exclusion, and its instructions for more information.

If you are a resident in a qualified continuing-care retirement community, you may be allowed a subtraction from federal adjusted gross income when computing your New York adjusted gross income for the portion of fees paid during the year that is attributable to the cost of providing long-term benefits under a continuing care contract. The amount of the subtraction is determined based on the fees paid for long-term benefits and your age. If you are married, file a joint return, and you and your spouse both qualify, you may each claim the subtraction. However, you may not claim any unused part of your spouse’s subtraction. 

A continuing-care retirement community is qualified if it has been issued a certificate of authority by the New York State Department of Health to operate as a continuing-care community. 

Social Security equivalent Railroad Retirement benefits

Social Security equivalent Tier 1 railroad retirement benefits that are included in federal adjusted gross income may be subtracted from your federal adjusted gross income when computing your New York adjusted gross income. 

If you file an IT-201, Resident Income Tax Return, you may claim a subtraction for the amount reported in your federal adjusted gross income on line 27.

If you file an IT-203, Nonresident and Part-Year Resident Income Tax Return, you may claim a subtraction for the amount reported in your federal adjusted gross income on line 26. 

Railroad Retirement benefits

If you included in your federal adjusted gross income either:

• supplemental annuity or Tier 2 benefits received under the Railroad Retirement Act of 1974, or
• benefits received under the Railroad Unemployment Insurance Act, and
• those benefits are exempt from state income taxes under Title 45 of the United States Code, 

you may subtract the amount of those benefits from your federal adjusted gross income when computing your New York adjusted gross income using Form IT-225. See IT-225-I, New York State Modifications, code S-122 Certain railroad retirement income and railroad unemployment insurance benefits.