Since you performed a direct rollover of your 403(b) to an IRA, none of your income should be federally or state taxed. In your federal return, make sure you select New York State and City Education when asked Where is the Distribution From? (when entering 1099-R). See the screenshot at the bottom left attached.
If your data doesn't automatically transfer to the NY return, then enter the full amount of your rollover as a government exclusion.
The State of New York Department of Taxes and Finance website states:
Your pension income is not taxable in New York State when it is paid by:
- New York State or local government
- the federal government, including Social Security benefits
- certain public authorities
If your pension is taxable to New York and you are over the age of 59 ½ or turn 59 ½ during the tax year, you may qualify for a pension and annuity exclusion of up to $20,000. This exclusion from New York State taxable income applies to pension and annuity income included in your federal adjusted gross income. For more information on the pension exclusions and other benefits for retired people, see Publication 36, General Information for Senior Citizens and Retired Persons.
