Bill Text: NY A05754 | 2019-2020 | General Assembly | Introduced


Bill Title: Grants a state personal income tax deduction for retirement plan distributions used to purchase long-term care insurance; exempts distributions from individual retirement accounts and individual retirement annuities from state personal income taxation when such distributions are used to purchase long-term health care insurance.

Spectrum: Partisan Bill (Democrat 11-0)

Status: (Introduced) 2019-02-14 - referred to ways and means [A05754 Detail]

Download: New_York-2019-A05754-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          5754
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    February 14, 2019
                                       ___________
        Introduced  by  M.  of  A.  ENGLEBRIGHT,  ABBATE,  CAHILL, MAGNARELLI --
          Multi-Sponsored by -- M. of A. ARROYO, COLTON, PEOPLES-STOKES,  PERRY,
          RIVERA,  SCHIMMINGER, WALLACE -- read once and referred to the Commit-
          tee on Ways and Means
        AN ACT to amend the tax law, in relation to exempting distributions from
          individual retirement accounts  and  individual  retirement  annuities
          from  state  personal income taxation when such distributions are used
          to purchase long-term health care insurance
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section  1. Subsection (c) of section 612 of the tax law is amended by
     2  adding a new paragraph 3-d to read as follows:
     3    (3-d) Distributions received by an individual, not otherwise  excluded
     4  pursuant to paragraph three or three-a of this subsection, to the extent
     5  includable  in  gross  income for federal income tax purposes, which are
     6  attributable to personal services  performed  by  such  individual  from
     7  employment,  which  arise  (i) from an employer-employee relationship or
     8  (ii) from contributions to a retirement plan which  are  deductible  for
     9  federal  income  tax purposes, to the extent such distributions are used
    10  during the taxable year to purchase a policy of  long-term  care  insur-
    11  ance,  as  defined  in section one thousand one hundred seventeen of the
    12  insurance law, for such individual or a dependent  of  such  individual.
    13  Such  distributions  shall  include  distributions  from  an  individual
    14  retirement account or an individual retirement annuity,  as  defined  in
    15  section  four  hundred  eight of the internal revenue code, and distrib-
    16  utions from self-employed individual and owner-employee retirement plans
    17  which qualify under section four hundred one  of  the  internal  revenue
    18  code.    Provided,  however, that any distributions excluded pursuant to
    19  this paragraph shall be subtracted from the  total  amount  of  premiums
    20  paid   when  computing  the  amount  of  allowable  credit  pursuant  to
    21  subsection (aa) of section six hundred six of this article.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06038-01-9

        A. 5754                             2
     1    § 2. Subsection (aa) of section 606 of the  tax  law,  as  amended  by
     2  section  1  of  part  P of chapter 61 of the laws of 2005, is amended to
     3  read as follows:
     4    (aa)  Long-term care insurance credit. (1) Residents. A taxpayer shall
     5  be allowed a credit against the tax imposed by  this  article  equal  to
     6  twenty percent of the premium paid during the taxable year for long-term
     7  care  insurance,  provided  that  any  amount  subtracted  from  federal
     8  adjusted gross income pursuant to paragraph three-d of subsection (c) of
     9  section six hundred twelve of this article shall be subtracted from  the
    10  amount  of  premium  paid during the taxable year and the twenty percent
    11  credit shall be based upon such recomputed amount of premium paid.    In
    12  order to qualify for such credit, the taxpayer's premium payment must be
    13  for  the  purchase  of or for continuing coverage under a long-term care
    14  insurance policy that qualifies for such credit pursuant to section  one
    15  thousand  one  hundred  seventeen of the insurance law. If the amount of
    16  the credit allowable under this subsection for any  taxable  year  shall
    17  exceed  the taxpayer's tax for such year, the excess may be carried over
    18  to the following year or years and may be deducted from  the  taxpayer's
    19  tax for such year or years.
    20    (2) Nonresidents and part-year residents. In the case of a nonresident
    21  taxpayer  or  a part-year resident taxpayer, the credit determined under
    22  this subsection shall be limited to the amount determined by multiplying
    23  the amount of such credit by the New York source fraction as  set  forth
    24  in  paragraph three of subsection (e) of section six hundred one of this
    25  article. The credit as so limited shall be applied as provided in  para-
    26  graph  one  of this subsection, provided that any amount subtracted from
    27  federal  adjusted  gross  income  pursuant  to  paragraph   three-d   of
    28  subsection (c) of section six hundred twelve of this article and section
    29  six  hundred  thirty-one  of  this  article shall be subtracted from the
    30  amount of premium paid during the taxable year and  the  twenty  percent
    31  credit shall be based upon such recomputed amount of premium paid.
    32    § 3. This act shall take effect immediately and shall apply to taxable
    33  years  commencing  on  January first in the year in which this act shall
    34  take effect and all subsequent taxable years.
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