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I have a married couple who are retired. The wife receives a…

I have a married couple...
I have a married couple who are retired. The wife receives a pension from NYS teachers retirement for $47,000 and an annuity from her 403B for 8,600. The husband works for a bank and received a $25,000 1099-R from his IRA. Is the $47,000 exempt on the NYS return?Is the $8,600 exempt up to $20,000 as an annuity and the IRA for the husband as well?
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3/18/2018
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,391
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Thank you for requesting me.

Pension income is not taxable in New York State when it is paid by:

If your pension is taxable to New York and you are over the age of 59 ½ or turn 59 ½ during the tax year, you may qualify for a pension and annuity exclusion of up to $20,000. This exclusion from New York State taxable income applies to pension and annuity income included in your federal adjusted gross income.

https://www.tax.ny.gov/pit/file/information_for_seniors.htm

See this about the exclusion for IRA distributions:

https://www.fool.com/knowledge-center/does-new-york-tax-iras.aspx

Please let me know if I can assist you further.

Thank you and best regards,

Barb

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Customer reply replied 4 months ago
Is it combined $20,000 for annuity and pension or $20,000 for each per person?

It's $20,000 combined for pension and annuity income included in the federal AGI.

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Customer reply replied 4 months ago
ok So if its a NYS pension which all of it is NYS exempt, the annuity up to $20,000 would be exempt as well?

The annuity would be exempt up to $20,000.

I apologize, but the $20,000 is for EACH taxpayer.

"Married taxpayers who both receive pension income are EACH entitled to a maximum pension and annuity income exclusion of $20,000 whether they file jointly or separately. However, you cannot claim any unused portion of your spouse’s exclusion."

https://www.tax.ny.gov/pdf/publications/income/pub36.pdf

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Customer reply replied 4 months ago
NYS pension of $47000 is exempt yes? Same taxpayer receives a $8,600 annuity is this exempt up to $20,000?

Pension income is not taxable in New York State when it is paid by:

  • New York State or local government
  • the federal government, including Social Security benefits
  • certain public authorities

The $8600 annuity would be exempt up to $20,000.

Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,391
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
Verified
Barbara and 87 other Tax Specialists are ready to help you
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Customer reply replied 4 months ago
thank you Barbara

You are most welcome.

Enjoy the rest of your Sunday!

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Customer reply replied 4 months ago
For the husband the $25,000 IRA is $20,000 exempt?

The $20,000 exclusion also applies to periodic and lump-sum payments from IRAs that are attributable to compensation for personal services. However, if the payments are derived from contributions that were made to the IRA after the taxpayer retired that are not attributable to compensation for personal services, then that portion of the payment is not eligible for the $20,000 exclusion.

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Customer reply replied 4 months ago
These were deductible IRA payments made in the past on prior year returns

So if contributions were made before he retired, up to $20,000 is exempt.

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Customer reply replied 4 months ago
Thanks again

You're welcome!

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