NY State Senate Bill 2019-S865

Senate Bill S865

2019-2020 Legislative Session

Grants a personal income tax deduction to taxpayers with a terminal illness who withdraw up to $20,000 from their 401(k) account on a hardship basis

download bill text pdf

Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 09, 2019	referred to investigations and government operations

2019-S865 (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §612, Tax L
Versions Introduced in Other Legislative Sessions:: 2013-2014: S7333
2015-2016: S1986
2017-2018: S460

2019-S865 (ACTIVE) - Summary

Grants a personal income tax deduction to taxpayers with a terminal illness who withdraw up to $20,000 from their 401(k) account on a hardship basis.

2019-S865 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S865

SPONSOR: YOUNG
 
TITLE OF BILL:

An act to amend the tax law, in relation to establishing a personal
income tax deduction for certain withdrawals from a 401(k) plan by a
taxpayer suffering from a terminal illness

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill grants a personal income tax deduction to taxpayers with a
terminal illness who withdraw up to $20,000 from their 401(k) account on
a hardship basis.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 adds a new paragraph 44 to subsection c of section 612 of the
tax law to provide that hardship distributions from a retirement account
established pursuant to section 401 (K) of the internal revenue code
shall be exempt from New York state tax, to the extent includable in

federal adjusted gross income, up to a maximum of $20,000. The exemption
shall only be available to those who have a medically terminable condi-
tion which can be expected to result in death within a period of not
more than 12 months.

 
JUSTIFICATION:

Federal law governs the granting of 401(k) hardship withdrawals. This
bill will assist those who are facing a life ending crisis who have
proven their hardship case for a withdraw of 401 (k) funds on a hardship
basis in accordance with federal regulations applicable to such plans.
It is unfair to subject terminally ill individuals to state income taxes
when they have proven it necessary to have access to these funds. These
funds are often needed to pay medical bills and other expenses which
accrue when a person faces the challenges associated with a terminal
illness. The situation can be magnified when the individual is no longer
able to continue in an employment situation. It is only equitable that
New York forgoes taxation on monies that an individual has earned which
become necessary for he or she to confront medical and personal chal-
lenges.

 
PRIOR LEGISLATIVE HISTORY:

2017, 2018: S.460 Referred to Investigations and Gov't Operations

2015, 2016: S.1986A Referred to Investigations and Gov't Operations

2014: S.7333 Referred to Investigations and Gov't Operations

 
FISCAL IMPLICATIONS:

Undetermined.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all subsequent
taxable years.

2019-S865 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    865
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              January 9, 2019
                                ___________
 
 Introduced  by  Sen.  YOUNG  -- 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  establishing  a  personal
   income  tax  deduction for certain withdrawals from a 401(k) plan by a
   taxpayer suffering from a terminal illness

   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 44 to read as follows:
   (44) HARDSHIP DISTRIBUTIONS  FROM  A  RETIREMENT  ACCOUNT  ESTABLISHED
 PURSUANT  TO  SECTION  401(K) OF THE INTERNAL REVENUE CODE TO THE EXTENT
 INCLUDABLE IN FEDERAL ADJUSTED GROSS INCOME, PROVIDED, HOWEVER, THAT THE
 EXCLUSION PROVIDED FOR IN THIS PARAGRAPH SHALL NOT EXCEED  TWENTY  THOU-
 SAND  DOLLARS;  PROVIDED,  FURTHER,  THAT  SUCH  EXCLUSION SHALL ONLY BE
 AVAILABLE BY REASON OF  A  MEDICALLY  DETERMINABLE  PHYSICAL  OR  MENTAL
 IMPAIRMENT  OF AN INDIVIDUAL TAXPAYER WHICH CAN BE EXPECTED TO RESULT IN
 DEATH WITHIN A PERIOD OF NOT MORE THAN TWELVE MONTHS.
   § 2. This act shall take effect immediately and shall apply to the tax
 year in which it takes effect and all subsequent tax years.
 
 
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03008-01-9

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.