NY State Senate Bill 2025-S5113

Senate Bill S5113

2025-2026 Legislative Session

Includes retirement plans in the exemption for pensions and annuities for certain persons and increases such exemption

download bill text pdf

Current Bill Status - In Senate Committee Budget And Revenue 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

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Feb 19, 2025	referred to budget and revenue

2025-S5113 (ACTIVE) - Details

See Assembly Version of this Bill:: A2017
Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §612, Tax L
Versions Introduced in 2023-2024 Legislative Session:: A7973

2025-S5113 (ACTIVE) - Summary

Includes retirement plans in the exemption for pensions and annuities for certain persons; increases such exemption to one hundred thousand dollars as adjusted by the consumer price index annually.

2025-S5113 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S5113

SPONSOR: BORRELLO
 
TITLE OF BILL:

An act to amend the tax law, in relation to including retirement plans
in the exemption for pensions and annuities for certain persons and to
increasing such exemption

 
PURPOSE OR GENERAL IDEA OF BILL:

Includes retirement plans in the exemption for pensions and annuities
for certain persons and increases such exemption

 
SUMMARY OF PROVISIONS:

Expands the tax exemptions for pensions and annuities to other retire-
ment plans and increases the exemption from twenty thousand dollars to
forty thousand in 2025, sixty thousand in 2026, eighty thousand in 2027,
and one hundred thousand in 2028. Indexes future increases to the
consumer price index.

 
JUSTIFICATION:

Currently, the limit on retirement plan tax exemptions is twenty thou-
sand dollars, a limit that was set in 1981 and has not increased since.
Due to various economic factors such as inflation and the cost of
living, that twenty thousand dollars is not worth the same amount today
as it was in 1981. This bill aims to rectify that and allow our older
New Yorkers to keep more of their income when at a point in their life
they are likely living off of a fixed income that comes from their
retirement plans.

Increasing this exemption is not a new and untested idea, New Jersey for
example, already has their tax exemption limit set to one hundred thou-
sand dollars. Several other states also have a higher limit than New
York currently does while also having a lower cost of living. New York
needs to increase its current limit.

Additionally, older New Yorkers would not need to stay in the workforce
longer than they want or need to or be forced to return to the workforce
in order to supplement their income. Furthermore, reducing the tax
burden on our aging population will help encourage them to remain in New
York, closer to their families.

 
PRIOR LEGISLATIVE HISTORY:

2023-24: A.7973

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

To be determined

 
EFFECTIVE DATE:
Immediately

2025-S5113 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5113
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             February 19, 2025
                                ___________
 
 Introduced  by Sen. BORRELLO -- 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 including  retirement  plans
   in the exemption for pensions and annuities for certain persons and to
   increasing such exemption

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 3-a of subsection (c) of section 612 of  the  tax
 law,  as  amended  by  section  3 of part I of chapter 59 of the laws of
 2015, is amended to read as follows:
   (3-a) Pensions [and], annuities AND OTHER RETIREMENT PLANS received by
 an individual who has attained the age of fifty-nine and  one-half,  not
 otherwise  excluded  pursuant  to paragraph three of this subsection, to
 the extent includible in gross income for federal income  tax  purposes,
 but  not  in  excess  of [twenty] FORTY THOUSAND DOLLARS FOR ANY TAXABLE
 YEAR BEGINNING ON OR AFTER JANUARY  FIRST,  TWO  THOUSAND  TWENTY-SEVEN,
 SIXTY THOUSAND DOLLARS  FOR  ANY   TAXABLE YEAR BEGINNING  ON  OR  AFTER
 JANUARY  FIRST,  TWO  THOUSAND TWENTY-EIGHT, EIGHTY THOUSAND DOLLARS FOR
 ANY TAXABLE  YEAR  BEGINNING  ON  OR  AFTER  JANUARY   FIRST, TWO  THOU-
 SAND  TWENTY-NINE,  ONE  HUNDRED  thousand  dollars FOR ANY TAXABLE YEAR
 BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND THIRTY, MULTIPLIED  BY
 ONE  PLUS  THE  PERCENTAGE  BY  WHICH  THE  CONSUMER PRICE INDEX FOR THE
 PRECEDING CALENDAR YEAR EXCEEDS THE CONSUMER PRICE INDEX FOR THE TAXABLE
 YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND THIRTY, which are
 periodic payments attributable to personal services  performed  by  such
 individual  prior to [his] THEIR retirement 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.
 However,  the  term "pensions and annuities" shall also include distrib-
 utions received by an individual who has attained the age of  fifty-nine
 and  one-half  from  an  individual  retirement account or an individual
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05032-01-5

 S. 5113                             2
 
 retirement annuity, as defined in section  four  hundred  eight  of  the
 internal  revenue  code, and distributions received by an individual who
 has attained the age of fifty-nine and one-half from self-employed indi-
 vidual  and  owner-employee retirement plans which qualify under section
 four hundred one of the  internal  revenue  code,  whether  or  not  the
 payments  are  periodic  in nature. Nevertheless, the term "pensions and
 annuities" shall not include any lump sum distribution,  as  defined  in
 subparagraph  (D)  of  paragraph  four of subsection (e) of section four
 hundred two of the internal revenue code and  taxed  under  section  six
 hundred three of this article. Where [a husband and wife] SPOUSES file a
 joint state personal income tax return, the modification provided for in
 this  paragraph  shall be computed as if they were filing separate state
 personal income tax returns. Where a payment would otherwise come within
 the meaning of the term "pensions and annuities" as set  forth  in  this
 paragraph,  except that such individual is deceased, such payment shall,
 nevertheless, be treated as a pension or annuity for  purposes  of  this
 paragraph  if such payment is received by such individual's beneficiary.
 FOR PURPOSES OF THIS PARAGRAPH, "CONSUMER PRICE INDEX" MEANS THE AVERAGE
 OF THE CONSUMER PRICE INDEX AS OF THE CLOSE OF THE  TWELVE-MONTH  PERIOD
 ENDING ON AUGUST THIRTY-FIRST OF SUCH TAXABLE YEAR FOR ALL-URBAN CONSUM-
 ERS PUBLISHED BY THE UNITED STATES DEPARTMENT OF LABOR.
   § 2. This act shall take effect immediately.

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