STATE OF NEW YORK ________________________________________________________________________ 2684 2019-2020 Regular Sessions IN SENATE January 28, 2019 ___________ Introduced by Sens. MAYER, BRESLIN, BROOKS, JACKSON, LIU, METZGER -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue AN ACT to amend the tax law, in relation to exempting distributions from individual retirement accounts and individual retirement annuities from state personal income taxation when such distributions are used to purchase long-term health care insurance The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subsection (c) of section 612 of the tax law is amended by 2 adding a new paragraph 3-d to read as follows: 3 (3-d) Distributions received by an individual, not otherwise excluded 4 pursuant to paragraph three or three-a of this subsection, to the extent 5 includable in gross income for federal income tax purposes, which are 6 attributable to personal services performed by such individual from 7 employment, which arise (i) from an employer-employee relationship or 8 (ii) from contributions to a retirement plan which are deductible for 9 federal income tax purposes, to the extent such distributions are used 10 during the taxable year to purchase a policy of long-term care insur- 11 ance, as defined in section one thousand one hundred seventeen of the 12 insurance law, for such individual or a dependent of such individual. 13 Such distributions shall include distributions from an individual 14 retirement account or an individual retirement annuity, as defined in 15 section four hundred eight of the internal revenue code, and distrib- 16 utions from self-employed individual and owner-employee retirement plans 17 which qualify under section four hundred one of the internal revenue 18 code. Provided, however, that any distributions excluded pursuant to 19 this paragraph shall be subtracted from the total amount of premiums 20 paid when computing the amount of allowable credit pursuant to 21 subsection (aa) of section six hundred six of this article. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD06038-01-9

S. 2684 2 1 § 2. Subsection (aa) of section 606 of the tax law, as amended by 2 section 1 of part P of chapter 61 of the laws of 2005, is amended to 3 read as follows: 4 (aa) Long-term care insurance credit. (1) Residents. A taxpayer shall 5 be allowed a credit against the tax imposed by this article equal to 6 twenty percent of the premium paid during the taxable year for long-term 7 care insurance, provided that any amount subtracted from federal 8 adjusted gross income pursuant to paragraph three-d of subsection (c) of 9 section six hundred twelve of this article shall be subtracted from the 10 amount of premium paid during the taxable year and the twenty percent 11 credit shall be based upon such recomputed amount of premium paid. In 12 order to qualify for such credit, the taxpayer's premium payment must be 13 for the purchase of or for continuing coverage under a long-term care 14 insurance policy that qualifies for such credit pursuant to section one 15 thousand one hundred seventeen of the insurance law. If the amount of 16 the credit allowable under this subsection for any taxable year shall 17 exceed the taxpayer's tax for such year, the excess may be carried over 18 to the following year or years and may be deducted from the taxpayer's 19 tax for such year or years. 20 (2) Nonresidents and part-year residents. In the case of a nonresident 21 taxpayer or a part-year resident taxpayer, the credit determined under 22 this subsection shall be limited to the amount determined by multiplying 23 the amount of such credit by the New York source fraction as set forth 24 in paragraph three of subsection (e) of section six hundred one of this 25 article. The credit as so limited shall be applied as provided in para- 26 graph one of this subsection, provided that any amount subtracted from 27 federal adjusted gross income pursuant to paragraph three-d of 28 subsection (c) of section six hundred twelve of this article and section 29 six hundred thirty-one of this article shall be subtracted from the 30 amount of premium paid during the taxable year and the twenty percent 31 credit shall be based upon such recomputed amount of premium paid. 32 § 3. This act shall take effect immediately and shall apply to taxable 33 years commencing on January first in the year in which this act shall 34 take effect and all subsequent taxable years.