New York park pension income was not subject to New York income tax. By working in the public park system, the taxpayer had been employed by the state.
Income from Park Pension
New York does not tax public pension income. Taxpayers can subtract pension benefits from adjusted gross income when preparing their tax return. However, pension benefits must:
- relate to services performed by a public employee; and
- be contributed, all or in part, by the state, its political subdivisions, or agencies.
In this case, the taxpayer had worked for a nonprofit corporation that operated and maintained a public park. A New York park authority created the taxpayer’s employer. And the state of New York created the park authority through legislation. In addition, the taxpayer’s employer carried out the public purpose and governmental function of park maintenance. The employer received almost all of its funding from the park authority. As a result, the taxpayer worked for the state.
Further, the nonprofit corporation funded the pension it offered to employees. Thus, the taxpayer received benefits from a public pension.
TSB-A-17(4)I, New York Commissioner of Taxation and Finance, October 10, 2017, ¶409-148