S T A T E   O F   N E W   Y O R K
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                                  4653

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                            February 7, 2013
                               ___________

Introduced  by M. of A. ENGLEBRIGHT, HEASTIE, ABBATE, CAHILL, MAGNARELLI
  -- Multi-Sponsored by -- M.  of  A.  ARROYO,  BOYLAND,  COLTON,  COOK,
  JACOBS,  MARKEY,  PEOPLES-STOKES, PERRY, RIVERA, SCHIMMINGER, SWEENEY,
  WEISENBERG -- read once and referred to  the  Committee  on  Ways  and
  Means

AN ACT to amend the tax law, in relation to exempting distributions from
  individual  retirement  accounts  and  individual retirement annuities
  from state personal income taxation when such distributions  are  used
  to purchase long-term health care insurance

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subsection (c) of section 612 of the tax law is amended  by
adding a new paragraph 3-d to read as follows:
  (3-D)  DISTRIBUTIONS RECEIVED BY AN INDIVIDUAL, NOT OTHERWISE EXCLUDED
PURSUANT TO PARAGRAPH THREE OR THREE-A OF THIS SUBSECTION, TO THE EXTENT
INCLUDABLE IN GROSS INCOME FOR FEDERAL INCOME TAX  PURPOSES,  WHICH  ARE
ATTRIBUTABLE  TO  PERSONAL  SERVICES  PERFORMED  BY SUCH INDIVIDUAL 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, TO THE EXTENT SUCH DISTRIBUTIONS  ARE  USED
DURING  THE  TAXABLE  YEAR TO PURCHASE A POLICY OF LONG-TERM CARE INSUR-
ANCE, AS DEFINED IN SECTION ELEVEN HUNDRED SEVENTEEN  OF  THE  INSURANCE
LAW,  FOR  SUCH  INDIVIDUAL  OR  A  DEPENDENT  OF  SUCH INDIVIDUAL. SUCH
DISTRIBUTIONS SHALL INCLUDE DISTRIBUTIONS FROM AN INDIVIDUAL  RETIREMENT
ACCOUNT  OR AN INDIVIDUAL RETIREMENT ANNUITY, AS DEFINED IN SECTION FOUR
HUNDRED EIGHT OF THE  INTERNAL  REVENUE  CODE,  AND  DISTRIBUTIONS  FROM
SELF-EMPLOYED INDIVIDUAL AND OWNER-EMPLOYEE RETIREMENT PLANS WHICH QUAL-
IFY  UNDER  SECTION  FOUR  HUNDRED  ONE  OF  THE  INTERNAL REVENUE CODE.
PROVIDED, HOWEVER, THAT ANY  DISTRIBUTIONS  EXCLUDED  PURSUANT  TO  THIS
PARAGRAPH  SHALL  BE  SUBTRACTED  FROM THE TOTAL AMOUNT OF PREMIUMS PAID

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02081-01-3

              

A. 4653                             2

WHEN COMPUTING THE AMOUNT OF ALLOWABLE  CREDIT  PURSUANT  TO  SUBSECTION
(AA) OF SECTION SIX HUNDRED SIX OF THIS ARTICLE.
  S  2.  Subsection  (aa)  of  section 606 of the tax law, as amended by
section 1 of part P of chapter 61 of the laws of  2005,  is  amended  to
read as follows:
  (aa)  Long-term care insurance credit. (1) Residents. A taxpayer shall
be allowed a credit against the tax imposed by  this  article  equal  to
twenty percent of the premium paid during the taxable year for long-term
care  insurance,  PROVIDED  THAT  ANY  AMOUNT  SUBTRACTED  FROM  FEDERAL
ADJUSTED GROSS INCOME PURSUANT  TO  PARAGRAPH  THREE-D  OF  SECTION  SIX
HUNDRED  TWELVE  OF  THIS ARTICLE SHALL BE SUBTRACTED FROM THE AMOUNT OF
PREMIUM PAID DURING THE TAXABLE YEAR AND THE TWENTY PERCENT CREDIT SHALL
BE BASED UPON SUCH RECOMPUTED AMOUNT OF PREMIUM PAID.  In order to qual-
ify for such credit, the taxpayer's premium  payment  must  be  for  the
purchase  of or for continuing coverage under a long-term care insurance
policy that qualifies for such credit pursuant to section  one  thousand
one  hundred seventeen of the insurance law. If the amount of the credit
allowable under this subsection for any taxable year  shall  exceed  the
taxpayer's  tax  for  such  year,  the excess may be carried over to the
following year or years and may be deducted from the taxpayer's tax  for
such year or years.
  (2) Nonresidents and part-year residents. In the case of a nonresident
taxpayer  or  a part-year resident taxpayer, the credit determined under
this subsection shall be limited to the amount determined by multiplying
the amount of such credit by the New York source fraction as  set  forth
in  paragraph three of subsection (e) of section six hundred one of this
article. The credit as so limited shall be applied as provided in  para-
graph  one  of this subsection, PROVIDED THAT ANY AMOUNT SUBTRACTED FROM
FEDERAL ADJUSTED GROSS INCOME PURSUANT TO PARAGRAPH THREE-D  OF  SECTION
SIX HUNDRED TWELVE OF THIS ARTICLE AND SECTION SIX HUNDRED THIRTY-ONE OF
THIS  ARTICLE SHALL BE SUBTRACTED FROM THE AMOUNT OF PREMIUM PAID DURING
THE TAXABLE YEAR AND THE TWENTY PERCENT CREDIT SHALL BE BASED UPON  SUCH
RECOMPUTED AMOUNT OF PREMIUM PAID.
  S 3. This act shall take effect immediately and shall apply to taxable
years  commencing  on  January first in the year in which this act shall
take effect and all subsequent taxable years.