Q:

How are the New York State retirement pensions taxed?

A:

Quick Answer

New York State retirement pension income is subject to federal income tax. It is not taxable by New York State or its municipalities. If you move to another state, the pension income may be taxable by the new state.

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Full Answer

For federal tax purposes, New York State retirement pension income is usually taxed as ordinary income; however, income resulting from participation in a plan before 1974 may have capital gains treatment. Generally, the part of the income you receive that is equal to your cost (the amount you put into the pension while you worked) is tax-free. Any income you receive that is greater than your cost is taxable.

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