Hello Patrice1986, The $20,000 retirement income exclusion in NY is for those taxpayers that have reached 59 1/2. It is pro-rated if you turned 59 1/2 in Tax Year 2021. NY tax calculation starts with the Federal Adjusted Gross Income- then makes additions and subtractions, so the increase in income for the IRA withdrawal is already in your New York tax return as increased income. The penalty is at the Federal level. There may be penalty or interest on the additional income if NY tax was not withheld on the 1099-R.
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