New York Senate Bill S10175

New York 2025-2026 Regular Session

• Introduced: 5/4/26
• Refer: 5/4/26

Caption

Increases the tax exemption for pensions and annuities for persons age fifty-nine and one-half or greater from $20,000 to $25,000 in 2027, $30,000 in 2028, $35,000 in 2029 and $40,000 for each subsequent year.

Summary

S10175 amends the New York tax law to increase the state income tax exemption for certain pensions and annuities received by individuals age 59 and one-half or older. Under current law, up to $20,000 of qualifying pension and annuity income may be excluded from New York taxable income; this bill phases that cap upward to $25,000 for tax years beginning on or after January 1, 2027, $30,000 in 2028, $35,000 in 2029, and $40,000 for each year thereafter. The bill applies to qualifying periodic pension payments, distributions from IRAs and certain retirement plans, and beneficiary payments treated as pensions or annuities under the statute. It also makes conforming wording changes, including replacing gendered language with gender-neutral terms such as "spouses." The measure takes effect immediately, but the higher exemption amounts are scheduled to begin in 2027 and phase in over several years.

Impact

The bill would amend section 612(c)(3-a) of the Tax Law, increasing the amount of retirement income that can be excluded from New York adjusted gross income for eligible taxpayers. Its practical effect would be to reduce state personal income tax liability for retirees and others receiving qualifying pension, annuity, IRA, and certain self-employed retirement distributions, while leaving federal tax treatment unchanged. The bill would also update statutory language to use gender-neutral terminology and would affect how joint filers compute the modification.

Sentiment

Based on the bill text and caption, the measure appears generally favorable to retirees and older taxpayers because it expands a long-standing retirement income exclusion. There is no recorded committee transcript or vote history provided, so there is no evidence of formal opposition or support statements in the available materials. The phased-in structure suggests an effort to balance tax relief with a gradual fiscal impact on state revenues.

Contention

The main likely point of contention is fiscal cost: increasing the pension and annuity exclusion would reduce state tax receipts, which may raise concerns about revenue loss and the distribution of benefits. Another possible issue is policy design, including whether the benefit should be limited to taxpayers age 59 and one-half or older and whether the phased increases and final $40,000 cap are appropriately targeted. No specific objections or supporters are identified in the provided transcripts or votes.