Senate Bill S2684

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2684
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             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:
 
   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.
                                                            LBD06038-01-9
              

 S. 2684                             2
 
   §  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 SUBSECTION (C) 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 qualify 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
 SUBSECTION (C) 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.
   § 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.