S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3653

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            February 13, 2015
                               ___________

Introduced  by  Sen.  ORTT  --  read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

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:

  Section  1. Subsection (c) of section 612 of the tax law is amended by
adding a new paragraph 3-d to read as follows:
  (3-D) DISTRIBUTIONS RECEIVED BY AN INDIVIDUAL, NOT OTHERWISE  EXCLUDED
PURSUANT TO PARAGRAPH THREE OR THREE-A OF THIS SUBSECTION, TO THE EXTENT
INCLUDABLE  IN  GROSS  INCOME FOR FEDERAL INCOME TAX PURPOSES, WHICH ARE
ATTRIBUTABLE TO PERSONAL SERVICES  PERFORMED  BY  SUCH  INDIVIDUAL  FROM
EMPLOYMENT,  WHICH  ARISE  (I) FROM AN EMPLOYER-EMPLOYEE RELATIONSHIP OR
(II) FROM CONTRIBUTIONS TO A RETIREMENT PLAN WHICH  ARE  DEDUCTIBLE  FOR
FEDERAL  INCOME  TAX PURPOSES, TO THE EXTENT SUCH DISTRIBUTIONS ARE USED
DURING THE TAXABLE YEAR TO PURCHASE A POLICY OF  LONG-TERM  CARE  INSUR-
ANCE,  AS  DEFINED  IN SECTION ONE THOUSAND ONE HUNDRED SEVENTEEN OF THE
INSURANCE LAW, FOR SUCH INDIVIDUAL OR A DEPENDENT  OF  SUCH  INDIVIDUAL.
SUCH  DISTRIBUTIONS  SHALL  INCLUDE  DISTRIBUTIONS  FROM  AN  INDIVIDUAL
RETIREMENT ACCOUNT OR AN INDIVIDUAL RETIREMENT ANNUITY,  AS  DEFINED  IN
SECTION  FOUR  HUNDRED  EIGHT OF THE INTERNAL REVENUE CODE, AND DISTRIB-
UTIONS FROM SELF-EMPLOYED INDIVIDUAL AND OWNER-EMPLOYEE RETIREMENT PLANS
WHICH QUALIFY UNDER SECTION FOUR HUNDRED ONE  OF  THE  INTERNAL  REVENUE
CODE.    PROVIDED,  HOWEVER, THAT ANY DISTRIBUTIONS EXCLUDED PURSUANT TO
THIS PARAGRAPH SHALL BE SUBTRACTED FROM THE  TOTAL  AMOUNT  OF  PREMIUMS
PAID   WHEN  COMPUTING  THE  AMOUNT  OF  ALLOWABLE  CREDIT  PURSUANT  TO
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.
                                                           LBD08509-01-5

              

S. 3653                             2

  S 2. Subsection (aa) of section 606 of the  tax  law,  as  amended  by
section  1  of  part  P of chapter 61 of the laws of 2005, is amended to
read as follows:
  (aa)  Long-term care insurance credit. (1) Residents. A taxpayer shall
be allowed a credit against the tax imposed by  this  article  equal  to
twenty percent of the premium paid during the taxable year for long-term
care  insurance,  PROVIDED  THAT  ANY  AMOUNT  SUBTRACTED  FROM  FEDERAL
ADJUSTED GROSS INCOME PURSUANT  TO  PARAGRAPH  THREE-D  OF  SECTION  SIX
HUNDRED  TWELVE  OF  THIS ARTICLE SHALL BE SUBTRACTED FROM THE AMOUNT OF
PREMIUM PAID DURING THE TAXABLE YEAR AND THE TWENTY PERCENT CREDIT SHALL
BE BASED UPON SUCH RECOMPUTED AMOUNT OF PREMIUM PAID.  In order to qual-
ify for such credit, the taxpayer's premium  payment  must  be  for  the
purchase  of or for continuing coverage under a long-term care insurance
policy that qualifies for such credit pursuant to section  one  thousand
one  hundred seventeen of the insurance law. If the amount of the credit
allowable under this subsection for any taxable year  shall  exceed  the
taxpayer's  tax  for  such  year,  the excess may be carried over to the
following year or years and may be deducted from the taxpayer's tax  for
such year or years.
  (2) Nonresidents and part-year residents. In the case of a nonresident
taxpayer  or  a part-year resident taxpayer, the credit determined under
this subsection shall be limited to the amount determined by multiplying
the amount of such credit by the New York source fraction as  set  forth
in  paragraph three of subsection (e) of section six hundred one of this
article. The credit as so limited shall be applied as provided in  para-
graph  one  of this subsection, PROVIDED THAT ANY AMOUNT SUBTRACTED FROM
FEDERAL ADJUSTED GROSS INCOME PURSUANT TO PARAGRAPH THREE-D  OF  SECTION
SIX HUNDRED TWELVE OF THIS ARTICLE AND SECTION SIX HUNDRED THIRTY-ONE OF
THIS  ARTICLE SHALL BE SUBTRACTED FROM THE AMOUNT OF PREMIUM PAID DURING
THE TAXABLE YEAR AND THE TWENTY PERCENT CREDIT SHALL BE BASED UPON  SUCH
RECOMPUTED AMOUNT OF PREMIUM PAID.
  S 3. This act shall take effect immediately and shall apply to taxable
years  commencing  on  January first in the year in which this act shall
take effect and all subsequent taxable years.