S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5754
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 14, 2019
                                ___________
 
 Introduced  by  M.  of  A.  ENGLEBRIGHT,  ABBATE,  CAHILL, MAGNARELLI --
   Multi-Sponsored by -- M. of A. ARROYO, COLTON, PEOPLES-STOKES,  PERRY,
   RIVERA,  SCHIMMINGER, WALLACE -- read once and referred to the Commit-
   tee 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 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.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD06038-01-9

 A. 5754                             2
 
   § 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 SUBSECTION (C) 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 qualify 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
 SUBSECTION (C) 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.