TaxtirementState guides · NY
How New York taxes retirement income
- New York doesn't tax Social Security benefits.
- Exclusions and subtractions for retirement income (details below):
- Pensions of New York State and local governments and the federal government.
- Pension and annuity income exclusion: from age 59½, at most $20,000 per person.
- Rates for 2026: 3.9% to 10.9%, graduated.
At a glance
| Income tax | Yes |
|---|---|
| Rates (2026) | 3.9% to 10.9%, graduated |
| Starts from | Federal adjusted gross income (AGI) |
| Standard deduction | $8,000 single, $16,050 married filing jointly |
| Social Security | Not taxed |
| Retirement income exclusions | 2 (see below) |
| Roth conversions | Taxable |
| Capital gains | Taxed like other income |
| Local income tax | Yes, in some places (see below) |
Tax rates
Brackets apply to New York taxable income. Other filing statuses are in the rules reference.
| Rate | Single: taxable income | Married filing jointly: taxable income |
|---|---|---|
| 3.9% | $0 to $8,500 | $0 to $17,150 |
| 4.4% | $8,500 to $11,700 | $17,150 to $23,600 |
| 5.15% | $11,700 to $13,900 | $23,600 to $27,900 |
| 5.4% | $13,900 to $80,650 | $27,900 to $161,550 |
| 5.9% | $80,650 to $215,400 | $161,550 to $323,200 |
| 6.85% | $215,400 to $1,077,550 | $323,200 to $2,155,350 |
| 9.65% | $1,077,550 to $5,000,000 | $2,155,350 to $5,000,000 |
| 10.3% | $5,000,000 to $25,000,000 | $5,000,000 to $25,000,000 |
| 10.9% | $25,000,000 and up | $25,000,000 and up |
Social Security
New York doesn't tax Social Security benefits.
Pensions, IRAs and 401(k)s
Pensions of New York State and local governments and the federal government (IT-201 line 26)
100% subtraction, any age, for pensions from NYS (incl. SUNY/CUNY/State Ed ORP portion), NY local governments, certain public authorities (MTA police 20-yr, MABSTOA, LIRR), and the U.S. government incl. military. Does NOT cover other states' public pensions, periodic 457 distributions, or supplemental salary-reduction annuities (those may use the $20,000 exclusion). QDRO distributions to a nonemployee spouse from these plans also qualify.
Pension and annuity income exclusion (IT-201 line 29)
Up to $20,000 per person of qualifying pension and annuity income included in federal AGI, received on or after the date the person reaches 59 1/2 (in the year of turning 59 1/2 only amounts received after that date count). Per person: each spouse on a joint return uses only his/her own income; unused exclusion cannot be transferred to the other spouse. Qualifies: periodic pension payments for prior services; periodic AND lump-sum IRA distributions (not those derived from contributions made after retirement); periodic 457, 403(b), 401(k), Keogh and cafeteria-plan distributions. Excludes: QDRO distributions to a nonemployee spouse, commercial annuities bought with own funds, SECURE 2.0 employer Roth-designated contributions. Roth conversion income qualifies if 59 1/2 at the time of conversion (TSB-M-98(7)I). Beneficiaries may use a decedent's exclusion (shared $20,000 cap) regardless of the beneficiary's age. Social Security does not count against the $20,000 (it is separately exempt).
Roth conversions
A Roth conversion counts as taxable income for New York. Whether a retirement income exclusion can cover part of it depends on the rules above.
Capital gains
Taxed like other income, at the rates above.
Credits and relief for older residents
- Real property tax credit (Form IT-214). Refundable credit for low-income homeowners/renters (household gross income $18,000 or less, which includes Social Security); larger credit if a household member is 65+. Only relevant to low-income retirees; amounts not captured here.
- New York State household credit. Small nonrefundable credit for low federal AGI households; not relevant to most retirees; amounts not captured here.
Local income taxes
New York City residents pay NYC personal income tax (researched separately in NYC.json; 2026 rates 3.078%-3.876% on the NYS taxable income base). Yonkers residents pay a resident income tax surcharge computed as a percentage of net New York State tax (16.75% in recent years - verify for 2026). MCTMT applies only to self-employment earnings in the MCTD.
More detail from our research notes
NYAGI = federal AGI + NY additions - NY subtractions (Social Security/Tier 1-2 RRB included in federal AGI, government pensions, $20,000 pension exclusion, U.S. bond interest, etc.). NY taxable income = NYAGI - NY standard deduction (fixed amounts, not indexed: $8,000 single/MFS, $16,050 MFJ/QSS, $11,200 HOH) or NY itemized deductions (IT-196; limited when NYAGI > $100,000) - $1,000 per dependent (no exemption for taxpayer/spouse). There is no age-65 deduction or exemption. Because NY starts from federal AGI, the OBBBA $6,000 senior deduction (below AGI) has no NY effect. 2026 rates: FY2026 budget cut the bottom five rates (4.0/4.5/5.25/5.5/6.0 -> 3.9/4.4/5.15/5.4/5.9) for 2026 with further cuts scheduled for 2027; the FY2027 budget (signed May 28, 2026) did not change PIT rates (it adopted a state tips exclusion). Bracket thresholds are statutory and not indexed. SUPPLEMENTAL TAX / RECAPTURE (IT-2105-I 2026 tax computation worksheets): if NYAGI <= $107,650 use the rate schedule. If NYAGI > $107,650 the benefit of lower brackets is recaptured: (a) MFJ taxable income <= $161,550 (single/MFS <= $215,400; HOH <= $269,300): tax = schedule tax + (flatTax - scheduleTax) x min(1, (NYAGI - 107,650)/50,000), where flatTax = TI x 5.40% for MFJ, 5.90% for single/MFS and HOH (the rate of the bracket that contains the cap); fully flat once NYAGI >= $157,650. (b) Higher brackets: tax = schedule tax + recaptureBase + incrementalBenefit x min(NYAGI - bracketStart, 50,000)/50,000 (ratio rounded to 4 decimals), where bracketStart is the lower edge of the taxpayer's top bracket. MFJ: TI 161,550-323,200 base $333 incr $807 (NYAGI over 161,550); TI 323,200-2,155,350 base $1,140 incr $3,071; TI 2,155,350-5,000,000 base $4,211 incr $60,350; TI > 5,000,000 base $64,561 incr $32,500. Single/MFS: TI 215,400-1,077,550 base $567 incr $2,047; 1,077,550-5,000,000 base $2,614 incr $30,172; > 5,000,000 base $32,786 incr $32,500. HOH: TI 269,300-1,616,450 base $787 incr $2,559; 1,616,450-5,000,000 base $3,346 incr $45,260; > 5,000,000 base $48,606 incr $32,500. NYAGI > $25,000,000: tax = TI x 10.9% flat. Capital gains, interest and dividends are ordinary income. IRA withdrawals and Roth conversions are fully taxable except the $20,000 exclusion (NY conforms to federal Roth treatment).
Pending confirmation
These points were still being confirmed against New York's published 2026 forms when this page was built. Most are waiting on forms the state publishes around the turn of the year.
6 items
- 2026 values from the 2026 IT-2105-I (estimated tax) instructions; confirm against the 2026 IT-201 instructions/tax table when released (expected Dec 2026-Jan 2027, https://www.tax.ny.gov/forms/income_cur_forms.htm).
- Recapture formula for case (a) (NYAGI $107,650-$157,650) implemented per the IT-2105-I worksheet: flat-rate tax minus schedule tax, times (NYAGI - 107,650)/50,000 rounded to 4 decimals; case (b) thresholds use 'excess of NYAGI over' the bracket start as printed.
- Yonkers resident surcharge rate for 2026 not researched here.
- Real property tax credit (IT-214) and household credit amounts not captured.
- IT-196 line 40 thresholds for 2026 (itemizedLimitThreshold*) are the 2025 amounts; 2026 IT-196-I not published (expected Dec 2026-Jan 2027, https://www.tax.ny.gov/pdf/current_forms/it/it196i.pdf).
- 2026 charity: IT-196 line 16 is taken from federal Schedule A line 11 (cash gifts within 60% of AGI) without the federal 0.5% floor; NY 2026 treatment of the OBBBA floor not confirmed.
Sources
Every figure comes from these documents, mostly the state's own forms, instructions and statutes.
- 2026 IT-2105-I: 2026 NYS tax rate schedules for all filing statuses, standard deduction table, tax computation (recapture) worksheets 1-16 with recapture base and incremental benefit amountshttps://www.tax.ny.gov/pdf/2026/inc/it2105i_2026.pdf
- 2025 IT-201-I: line 26 government pension subtraction, line 29 $20,000 pension and annuity income exclusion rules and examples, line 27 Social Security subtractionhttps://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf
- TSB-M-98(7)I: Roth IRA conversion income qualifies for the $20,000 pension exclusion if age 59 1/2 at conversionhttps://www.tax.ny.gov/pdf/memos/income/m98_7i.pdf
- FY2027 enacted budget summary (no PIT rate changes; tips exclusion) - secondaryhttps://www.bdo.com/insights/tax/new-york-passes-fiscal-2027-budget-ushering-in-wide-ranging-tax-reform
- N.Y. Tax Law 601(a)-(c) clauses (viii) (2027-2032: 3.8/4.3/5.05/5.3/5.8% bottom rates, top rates 9.65/10.3/10.9%) and (ix) (2033+: top rate 8.82%); most recent revision 2025-07-11, so the 2026 session (FY2027 budget, signed May 2026) did not change PIT rateshttps://www.nysenate.gov/legislation/laws/TAX/601
- N.Y. Tax Law 612(c)(3-a): $20,000 pension and annuity exclusion at 59 1/2, unchanged in the 2026-06-05 and 2026-09-04 revisions (read 2026-10-02)https://www.nysenate.gov/legislation/laws/TAX/612
Taxtirement's New York calculation is also checked against a second, independent implementation on 1,000 random households. How we check our numbers.
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This page summarizes New York's 2026 rules as Taxtirement applies them, for education and planning. It isn't tax advice, and it doesn't cover every situation (for example part-year residents, businesses or military-only provisions). Rules change; check the state's current instructions, or a tax professional, before you act. Spotted something wrong? Tell us.