Updated October 29, 2026. Quick answer: No. Line 26 of the 2025 Form IT-201 subtracts pension income from a “local government pension plan or federal government pension plan” with no dollar limit printed, while other pension income only gets the separate line 29 exclusion of up to $20,000 at age 59½.
What New York does with a FERS or CSRS annuity
| Question | What the New York documents say |
|---|---|
| What the source says | New York lets a retiree subtract pension income from a federal government pension plan, including pensions from the United States or any agency of the United States, from federal adjusted gross income, with no dollar cap printed. |
| Amount or limit | Full subtraction on Form IT-201 line 26 of the federal government pension amount included in federal adjusted gross income; no dollar limit is printed for that line. Separately, the line 29 pension and annuity income exclusion is up to $20,000 but is for income not from a federal or New York government pension plan. |
| Change for 2026 | No 2026 change is printed in the state documents cited here. |
In the New York documents’ own words
- “Pensions of New York State and local governments and the federal government” (Instructions for Form IT-201 (2025))
- “any agency or instrumentality of the United States” (Instructions for Form IT-201 (2025))
- “you were 59½ before January 1, 2025” (Instructions for Form IT-201 (2025))
- “S-107: Pensions of New York State and local governments” (Instructions for Form IT-225 (2025))
- “any agency or instrumentality of any of the listed” (Instructions for Form IT-225 (2025))
- “from a federal government pension plan” (Instructions for Form IT-225 (2025))
How this differs from other pensions in New York
Federal and New York government pensions are subtracted in full on line 26, while other pension and annuity income only qualifies for the line 29 exclusion of up to $20,000 for people age 59½ or older. See also Does New York tax pensions? and military retirement pay.
FERS, CSRS and your TSP
The state documents cited here do not address TSP withdrawals by name; they say periodic and lump-sum payments from an IRA and 401(k) distributions can qualify only for the $20,000 line 29 exclusion, and 457 plan payments are excluded from line 26. For the Thrift Savings Plan itself, see Does New York tax TSP withdrawals? and the TSP calculator.
What the New York documents leave open
The IT-201 instructions do not name FERS, CSRS or the TSP, so this page relies on the line 26 wording about a federal government pension plan. The Tax Law section and Form IT-225 instructions were not read.
Common mistakes
- Claiming the $20,000 line 29 exclusion on a federal pension. That line is for pension income that is not from a federal or New York government plan, and the federal pension goes on line 26.
- Assuming line 26 covers a 457 plan payment. The instructions exclude 457 plan payments from it.
Related: Does New York tax pensions?, New York military retirement pay, New York retirement deduction line by line, and FERS, TSP and Social Security sequencing.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare adviser services and total fees
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
Explore optional adviser matching
Considering financial advice? Request an adviser introduction with no obligation to hire.
The form is run by Kapitalwise, our advisor-matching partner. Requesting an introduction is free. Submitting the form shares your contact details with advisers, so expect calls and texts. Advisers pay for introductions. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you hire anyone. A match is not guaranteed.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- Instructions for Form IT-201 (2025): https://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf
- Instructions for Form IT-225 (2025): https://www.tax.ny.gov/pdf/current_forms/it/it225i.pdf
Read from the state documents linked above on October 29, 2026. General information, not tax advice.