New York Bill Introduces Major Change to Retirement Taxes
If you're planning on moving out of New York State after retirement, you may want to think twice.
A new bill is being proposed by New York Assemblyman Angelo Santabarbara that would ease financial burdens for retirees in the Empire State and address the steady stream of people leaving for other states.
Santabarbara's bill is aimed at simplifying tax burdens and offering much-needed relief to retirees who wish to stay in New York.
According to the New York Assemblyman, the proposal provides tax exemptions for pension payouts which Santabarbara says will result in "easing financial strain on retirees and supporting a secure retirement."
There are eight states that have no state income tax at all. Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming don't levy any additional taxes on income, including pensions. In addition, Illinois, Mississippi and Pennsylvania offer exemptions on retirement income including pensions, Social Security, pensions, IRAs and 401(k) distributions.
If the new bill becomes law, New York will be added to this list, allowing residents to earn retirement income without the burden of state taxes. Santabarbara says the main goal is to keep more money in the pocket of retirees, incentivizing them to stay in New York instead of moving out of state in retirement to take advantage of tax savings.
Organizations such as the AARP have advocated for "equitable pension tax policies." There are 26 states, including New York, that currently tax retirement income. Santabarbara hopes that new legislation will lead the way to reforming these tax policies.