New York ~ Personal Income Tax: Retirement Distribution Subtraction Created for Certain Taxpayers Affected by Flooding

A New York personal income tax subtraction from federal adjusted gross income has been enacted for certain distributions from an eligible retirement plan made on or after April 1, 2017, and before April 2, 2022. The subtraction will apply only if: (1) the taxpayer’s primary residence was located in the area affected by the disaster declared under the governor’s Executive Order 165 of 2017, declaring a state of emergency, dated May 3, 2017; (2) the residence incurred damage due to coastal flooding, widespread erosion, and water damage caused by the disaster; (3) the damage qualifies for the casualty deduction under IRC §165 (determined without regard to whether the loss exceeds 10% of adjusted gross income); and (4) during the taxable year, the taxpayer uses the entire amount of the distribution to pay for repairs needed as a result of the damage. The amount of the distribution that otherwise may be subtracted must be reduced by any deduction claimed by the taxpayer for the damage under IRC §165. In addition, the taxpayer cannot claim a subtraction modification (for certain pensions and annuities) under Tax Law §612(c)(3-a) for the distribution.

Ch. 85 (A.B. 8013), Laws 2017 (as amended by Part J of Ch. 61), effective July 10, 2017, applicable to taxable years beginning on or after January 1, 2017

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