NY State Senate Bill 2017-S9158

Senate Bill S9158

2017-2018 Legislative Session

Grants a state personal income tax deduction for retirement plan distributions used to purchase long-term care insurance

download bill text pdf

Archive: Last Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Aug 31, 2018	referred to rules

2017-S9158 (ACTIVE) - Details

See Assembly Version of this Bill:: A6238
Current Committee:: Senate Rules
Law Section:: Tax Law
Laws Affected:: Amd §§612 & 606, Tax L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S1397
2011-2012: S228, A4149
2013-2014: S1066, A4653
2015-2016: S3653, A5546
2019-2020: S2684, A5754
2021-2022: S20, A6631
2023-2024: S2329

2017-S9158 (ACTIVE) - Summary

Grants a state personal income tax deduction for retirement plan distributions used to purchase long-term care insurance; exempts 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.

2017-S9158 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S9158

SPONSOR: MAYER
 
TITLE OF BILL:

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

 
PURPOSE OR GENERAL IDEA OF BILL:

Allows tax free withdrawals from retirement IRA's and retirement annui-
ties for the purchase of the premiums for long-term care insurance.

 
SUMMARY OF PROVISIONS:

Section 1 amends section 612 of the tax law by adding a new subsection
3-d which exempts distributions from individual retirement accounts and
individual retirement annuities from state personal taxation when such
distributions are used to purchase long-term health care insurance.

 
JUSTIFICATION:

Planning for future long-term care needs is a goal that New York State
continues to support as a way to save Medicaid dollars and as a way for
individuals to be able to manage their own care and improve outcomes.
Different strategies and ideas need to be explored to encourage individ-
uals to think in advance and to plan for their personal long-term care
needs.

This legislation provides one more tool for individuals to accomplish
this goal by allowing retirement IRA's and retirement annuities to be
tapped tax free for the purpose of purchasing long-term care insurance.
Long-term care insurance can be prohibitively costly for some individ-
uals yet these individuals may have a retirement IRA or retirement annu-
ity that would afford them an opportunity to purchase long-term care
insurance. Authorizing tax free withdrawals from these accounts to cover
the costs of long-term care insurance premiums complies with the inter-
est and goals of the state, and opens up an avenue of planning and
affording long-term care insurance should one's monthly income not be
sufficient to afford the premiums.

 
PRIOR LEGISLATIVE HISTORY:

2011-12 A4149A referred to ways and means
2013-14 A4653 referred to ways and means
2015-16 A5546 referred to ways and means
2017-18 A6238 referred to ways and means

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None

 
EFFECTIVE DATE:
Immediately and shall apply to taxable years commencing on the first of
January in the year in which the act shall take effect

2017-S9158 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9158
 
                             I N  S E N A T E
 
                              August 31, 2018
                                ___________
 
 Introduced  by  Sen.  MAYER  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 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 ONE THOUSAND ONE 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 DISTRIB-
 UTIONS FROM SELF-EMPLOYED INDIVIDUAL AND OWNER-EMPLOYEE RETIREMENT PLANS
 WHICH QUALIFY 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   WHEN  COMPUTING  THE  AMOUNT  OF  ALLOWABLE  CREDIT  PURSUANT  TO
 SUBSECTION (AA) OF SECTION SIX HUNDRED SIX OF THIS ARTICLE.
   § 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD03682-01-7

 S. 9158                             2
 
 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.
   § 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.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.