Updated October 7, 2026. Quick answer: Only if you live there. New York’s own instructions say “Certain pension income received while a nonresident is not” taxable to New York State, while residents may exclude up to $20,000 of qualifying private pension and annuity income.
How New York treats a pension earned elsewhere
| Item | What the state documents say |
|---|---|
| Nonresidents | A nonresident is subject to New York tax on income derived from New York sources. The Form IT-203 instructions say certain pension income received while a nonresident is not taxable to New York and stays out of the New York State amount column, and they cite the federal bar on state taxation of nonresident retirement income. Pension or annuity income that is not exempt and is based on services performed inside and outside the state is reported only to the extent the services were performed in New York. This row rests on the IT-203 instructions. The source says: “U.S. Code, Title 4, § 114, prohibits states from taxing”. New York source income for a nonresident covers items such as services performed in New York and real property located there. |
| Residents with a pension earned elsewhere | New York resident tax starts from federal adjusted gross income plus New York additions and minus New York subtractions, so a pension in federal income is part of the base unless a subtraction applies. Pensions from New York State or local government plans or from federal government plans are subtracted on line 26, and other qualifying pension and annuity income can be excluded up to $20,000 on line 29. This row rests on the IT-201 resident instructions. The instructions do not limit the resident rule by the state where the pension was earned. |
| Part-year residents (year of a move) | A part-year resident pays New York tax on all income received while a resident and on New York source income received while a nonresident. Form IT-203 calculates a base tax as if the person were a full-year resident, then applies an income percentage to apportion the tax. This row rests on the IT-203 instructions. On line 10 a part-year resident enters the part of the pension received while a New York resident. |
| Rate | For 2025 the New York State tax rate schedule prints graduated rates from 4% on the lowest income to 10.9% on the highest bracket. The schedule is in the IT-201 instructions. |
| Return to file | Full-year residents file Form IT-201. Nonresidents and part-year residents file Form IT-203. Each return has its own instruction booklet. |
| Pension and annuity income exclusion | A resident who was 59 and a half before January 1, 2025 may exclude qualifying pension and annuity income that is not from a New York or federal government plan, up to $20,000. Married filers may each exclude up to $20,000 of their own qualifying income. This row rests on the IT-201 resident instructions. The source says: “federal adjusted gross income, but not more than $20,000.” A person who became 59 and a half during 2025 counts only the amount received after that point. |
A $40,000 move-year example
A retiree receives $40,000 of pension in the year of a move: $20,000 before the move date, as a New York resident, and $20,000 after leaving.
The first $20,000 can be taxed by New York; the rest is outside its reach under the federal rule below. Taxed wholly at the lowest printed rate, 4%, the tax on it is computed as $20,000 x 0.04 = $800; taxed wholly at the highest, 10.9%, it is computed as $20,000 x 0.109 = $2,180. The real figure falls between these bounds before any exclusion or credit. Federal tax still applies.
The federal rule that protects a nonresident
4 U.S.C. 114(a) bars a state income tax on retirement income of an individual “who is not a resident or domiciliary of such State”. Retirement income means certain plan payments made as a “series of substantially equal periodic payments”, so not every payment is covered.
Related: how New York taxes retirement income, whether New York taxes pensions, New York to Arizona retirement taxes, New York to Delaware retirement taxes, out-of-state pension tax by state, and deferred compensation lump sums after a move.
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 vetted advisors for your retirement move
If your portfolio is $250,000 or more, this connects you (free, with no obligation to hire anyone) with 2 to 3 vetted advisors.
Before you start, what actually happens. The matching service is run by WiserAdvisor, an independent advisor-matching company. It opens on their site, asks for your ZIP code and a few questions, and matches you with 2 to 3 vetted advisors. It is free to you.
WiserAdvisor states the service is built for portfolios of $250,000 and above. By submitting, you consent to emails, phone calls and text messages from WiserAdvisor and up to three advisors, so expect to be contacted. Clear Money Guide may earn a referral payment for a qualifying completed form, whether or not you ever hire anyone.
Opens on WiserAdvisor’s site in a new tab.
See how an advisor plans your pension move
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
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
- 2025 Instructions for Form IT-201, Full-Year Resident Income Tax Return (NY Department of Taxation and Finance): https://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf
- 2025 Instructions for Form IT-203, Nonresident and Part-Year Resident Income Tax Return (NY Department of Taxation and Finance): https://www.tax.ny.gov/pdf/current_forms/it/it203i.pdf
- 4 U.S.C. 114, Limitation on State income taxation of certain pension income (U.S. Government Publishing Office, 2023 edition): https://www.govinfo.gov/content/pkg/USCODE-2023-title4/html/USCODE-2023-title4-chap4-sec114.htm
Sources: the primary documents linked above, read on October 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.