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Retirement tax questions
New York does give a 20,000 exclusion to retirement income, however if the income was inherited, the exclusion (for the inherited distributions) could be reduced.
The exclusion could be reduced if the original owner had multiple accounts and/or multiple beneficiaries.
The original account holder's 20,000 exclusion is transferred to ALL the beneficiaries by their share of the funds inherited.
If the inherited funds were split evenly between two beneficiaries, they each can claim only up to 10,000 annual exclusion on the distributions from the inherited IRA (and still only up to 20,000 each total). So if one of them took a 9,000 distribution from their eligible personal account and also a 13,000 from the inherited account, they would only be allowed to exclude 19,000.
If there was only one beneficiary, there would be no reduction.
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