Updated September 5, 2026. Quick answer: New York fully exempts all New York state and local government pensions and all federal government pensions, including military retirement pay, from state income tax with no dollar cap. Separately, up to $20,000 of other pension and annuity income, such as private pensions, IRA, and 401k distributions, can be excluded each year once the recipient is 59 and a half or older.
New York Form IT-201, line by line: New York Form IT-201 lines 15 and 27, New York Form IT-201 lines 36 to 38 and New York Form IT-201 lines 47 and 47a.
State retirement-income forms, line by line: New York IT-201 pension exclusion.
Read box by box from the IRS form text: Form 1099-R boxes 14 to 19.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: New York tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does New York tax 403(b) and 457(b) withdrawals.
More IRS forms and schedules, read line by line: Form W-4P instructions.
Drawing a pension? Whether the state withholds tax from it, from its own documents: New York tax withholding on pension payments.
The New York City Teachers’ Retirement System options, refund and loan rules, from the system’s own documents: NYC TRS retirement decisions.
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: New York tax withholding on IRA and 401(k) withdrawals.
Taking money out of your TSP? How the state taxes it, from its own tax documents: Does New York tax TSP withdrawals?.
A pension earned in another state, or paid after a move, is covered here: does New York tax out-of-state pensions.
Trusts have their own page: does New York tax trust income.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does New York have an inheritance tax?.
Dividends and interest have their own page: does New York tax dividends and interest.
Making a gift or planning an estate? The state’s gift tax answer, from its own tax documents: Does New York have a gift tax?.
Annuity payments have their own page: does New York tax annuity income.
Military retired pay has its own page: does New York tax military retirement.
Saving for a child’s college? The state’s 529 break has its own page: New York 529 plan tax deduction.
Selling stocks, funds or real estate has its own page: does New York tax capital gains.
Withdrawals from a 401(k) or IRA have their own page: does New York tax 401(k) and IRA withdrawals.
The NYCERS option election, refund and buyback, from the system’s own pages: NYCERS retirement decisions.
More on New York: How to Reinstate an LLC in New York.
Related state retirement tax guides: Does New York Tax Social Security? and New York to Delaware Retirement Taxes.
Confidence note: high. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how New York taxes retirement income generally.
Pending, not current law: Senate Bill S2571A would have raised the $20,000 pension and annuity exclusion in steps to $40,000 by 2030, but its enacting clause was stricken on May 27, 2025, so it did not advance and current law is unchanged.
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Pensions paid to officers and employees of New York State, its subdivisions, and its agencies are fully excluded from New York taxable income, with no dollar cap and no age requirement, to the extent the pension is included in federal adjusted gross income. |
|---|---|
| Private (employer) pensions | Private employer pensions do not get the unlimited government exclusion. Instead, a taxpayer who has reached 59 and a half can exclude up to $20,000 of qualifying pension and annuity income per year under the separate pension and annuity income exclusion. The pension must generally be paid in periodic payments and be attributable to an employer employee relationship or deductible retirement plan contributions. Amounts above $20,000, or received before age 59 and a half, are taxed as ordinary New York income. |
| Federal government pensions (FERS/CSRS) | Pensions paid to officers and employees of the United States government are excluded from New York taxable income on the same unlimited, no age requirement basis as New York state and local government pensions. |
| Military retirement pay | Military retirement pay is treated as a federal government pension for New York purposes and is fully excluded with no dollar cap, the same as other federal government pensions. |
| IRA and 401(k)/403(b) distributions | IRA, 401k, and 403b distributions that are not government pensions fall under the same $20,000 pension and annuity income exclusion available once the taxpayer is 59 and a half, subject to the periodic payment and other eligibility rules in that provision. Married couples who each receive qualifying income can each claim up to $20,000. |
| General retirement-income exclusion | The $20,000 pension and annuity income exclusion for those 59 and a half or older is itself the general, non-government-specific exclusion in New York law. There is no additional broader age-based exclusion beyond it. |
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Source: WiserAdvisor’s service descriptionSocial Security
New York does not tax Social Security benefits at all, they are fully subtracted from federal adjusted gross income under Tax Law 612(c); see the sibling Social Security page for details. Social Security has its own rules in every state; see the full breakdown in how New York taxes retirement income generally.
Figures verified against the New York State Department of Taxation and Finance Form IT-201-I instructions for tax year 2025 and the text of Senate Bill S2571A on September 30, 2026; the official stricken-enacting-clause status of S2571A, the Tax Law section 612(c) text and the Social Security subtraction were not re-checked.
Statute and sources
Governing citation: N.Y. Tax Law sec. 612(c), paragraphs (3) and (3-a).
- New York State Senate, full text of NY Tax Law Section 612(c)
- New York State Senate, Bill S2571A text and status
Read September 5, 2026.
Related: how New York taxes retirement income generally · does New York tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.