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pinokeeo
New Member

Do we get the $20000 pension exclusion on our fed and state return?

My wife and I receive pensions from our past employers .We are over 70 years old.Do we get the $20000.00 exclusion
4 Replies
SweetieJean
Level 15

Do we get the $20000 pension exclusion on our fed and state return?

Which state?

pinokeeo
New Member

Do we get the $20000 pension exclusion on our fed and state return?

Up state New York

DanielV01
Employee Tax Expert

Do we get the $20000 pension exclusion on our fed and state return?

More than likely, the answer is yes.  The following is an excerpt from  Publication 36, General Information for Senior Citizens and Retired Persons.   (Click on link for the full Publication.  Different font used to show article quote):

 

If you were age 59½ or older for the entire tax year, you may exclude up to $20,000 of your qualified pension and annuity income from your federal adjusted gross income for purposes of determining your New York adjusted gross income. If you became age 59½ during the tax year, the exclusion is allowed only for the amount of pension and annuity income received on or after you became 59½, but not more than $20,000. Qualified pension and annuity income includes:

  • periodic payments for services you performed as an employee before you retired;
  • periodic and lump-sum payments from an IRA attributable to compensation for personal services, but not payments derived from contributions made after you retired that are not attributable to compensation for personal services;
  • periodic distributions from an annuity contract (IRC section 403(b)) purchased by an employer for an employee, and the employer is a corporation, community chest fund, foundation or public school;
  • periodic payments from an HR-10 (Keogh) plan, but not payments derived from contributions made after you retired;
  • lump-sum payments from an HR-10 (Keogh) plan, but only if federal Form 4972, Tax on Lump Sum Distributions, is not used. Do not include that part of your payment that was derived from contributions made after you retired;
  • periodic distributions from deferred compensation plans sponsored by state and local governments and tax-exempt organizations (under IRC section 457); and
  • periodic distributions of benefits from a cafeteria plan (IRC section 125) or a qualified cash or deferred profit-sharing or stock bonus plan (IRC section 401(k)), but not distributions derived from contributions made after you retired.

 

The exclusion also applies to pension and annuity income received by an estate or trust if the income meets the requirements as described above.

 

As long as your retirement income falls into one of the categories described above, you should qualify for the deduction.

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SweetieJean
Level 15

Do we get the $20000 pension exclusion on our fed and state return?

Do we get the $20000 pension exclusion on our fed and state return?

 

but not on Federal.

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