Yet another example of why taxpayers are fleeing NYS. It appears, based on S7508B, NYS will not follow the provisions of the CARES Act. What does this mean in reference to corona-virus related distributions (CRDs) from retirement plans/IRAs? Under the CARES Act, qualified individuals are permitted to take a distribution of up to $100,000 from a retirement plan/IRA. By default, the CRD distribution is split evenly over federal tax years 2020, 2021, and 2022 if the distribution is not repaid. Or the taxpayer could elect to include all of the income from a CRD in their 2020 income. For some taxpayers, splitting the distribution over a three-year period may result in federal tax savings. BUT, guess what? If NYS is not going to follow the CARES Act, a NYS taxpayer will be required to report the entire CRD distribution in tax year 2020. Therefore, people considering taking a CRD distribution should carefully review all of their retirement plans/IRAs to determine which is the most favorable to limit or entirely avoid NYS/NYC income taxes.
https://www.thomanntax.com/wp-content/uploads/2017/07/logo1.png 79 77 Peter Thomann, EA, CFP®, CDFA® http://www.thomanntax.com/wp-content/uploads/2017/07/logo.png Peter Thomann, EA, CFP®, CDFA®2020-05-06 13:48:072020-05-14 16:24:50NYS Strikes Again!