S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2329
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 19, 2023
                                ___________
 
 Introduced  by Sens. MAYER, BRESLIN, JACKSON, KRUEGER, LIU -- read twice
   and ordered printed, and when printed to be committed to the Committee
   on Budget and Revenue
 
 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.
                                                            LBD02351-01-3
 S. 2329                             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, paragraph 1 as
 amended by section 1 of part E of chapter 59 of the  laws  of  2020,  is
 amended to read as follows:
   (aa)  Long-term  care  insurance credit. (1) Residents. There shall be
 allowed a credit against the tax imposed by this article  in  an  amount
 equal to twenty percent of the premiums 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. The credit amount  shall  not  exceed  one  thousand  five
 hundred  dollars  and  shall  be  allowed only if the amount of New York
 adjusted gross income required to be reported on the return is less than
 two hundred fifty thousand dollars. 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 quali-
 fies for such credit pursuant to section one thousand one hundred seven-
 teen 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.