New York retirement taxes at a glance (2026)
| State income tax | Graduated, top rate 10.9%New York has graduated rates from 4% to 10.9%. New York City and Yonkers add local income taxes. |
|---|---|
| Social Security | Not taxedNew York does not tax Social Security benefits. |
| Pensions | Partly taxedPeople age 59½ or older can exclude up to $20,000 a year of private pension and annuity income ($40,000 for a married couple if both qualify). Amounts above that are taxed. Exclusion: up to $20,000 (age 59.5+). |
| 401(k) and IRA withdrawals | Partly taxedIRA distributions and other retirement plan payments count toward the same $20,000 exclusion for people 59½ or older. Amounts above that are taxed. |
| Government pensions | Not taxedPensions from New York State, its local governments, and the federal government are fully exempt. Government pensions from other states only get the $20,000 exclusion. |
| Military retirement pay | Not taxedMilitary retirement pay is fully exempt as a federal pension. |
| Estate tax | Yes, above $7,350,000New York has an estate tax with rates from 3.06% to 16%. The exemption is $7,350,000 for 2026 (up from $7,160,000 in 2025). |
| Inheritance tax | No |
| Property tax help for seniors | The Senior Citizens Exemption can cut a home's assessed value by up to 50% for people 65 and older with limited income. Enhanced STAR is available to homeowners 65+ with income up to $110,750 (2026). |
| Sales tax | Combined state and local sales tax averages about 8.54%. |
Recent changes and good to know
- The 2026 estate tax exemption is $7,350,000; estates slightly above the exemption face a 'cliff' that can tax the whole estate.
How to lower your retirement taxes in New York
- Mix your income sources. Roth IRA withdrawals are tax-free at the federal level and generally in New York too, so a Roth conversion before retirement can cut state tax later. Try the Roth conversion calculator.
- Watch federal Medicare costs. Large IRA withdrawals can raise your Medicare premiums. Check the 2026 IRMAA brackets.
- Think about your heirs. See what your IRA will really cost your family with the Family Tax Rate calculator.
- Comparing states? These have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
Frequently asked questions
Does New York tax retirement income?
Partly. New York does not tax Social Security, military, or New York and federal government pensions, and it exempts the first $20,000 of other retirement income for people 59½ and older.
Does New York tax Social Security?
New York does not tax Social Security benefits.
Does New York tax pensions?
People age 59½ or older can exclude up to $20,000 a year of private pension and annuity income ($40,000 for a married couple if both qualify). Amounts above that are taxed.
Does New York tax 401(k) and IRA withdrawals?
IRA distributions and other retirement plan payments count toward the same $20,000 exclusion for people 59½ or older. Amounts above that are taxed.
Does New York tax military retirement pay?
Military retirement pay is fully exempt as a federal pension.
Does New York have an estate or inheritance tax?
New York has an estate tax with rates from 3.06% to 16%. The exemption is $7,350,000 for 2026 (up from $7,160,000 in 2025).
Sources (last verified 2026)
- New York Tax Law section 612 — New York State Senate (2026-09-24)
- New York State Tax Facts for 2026 Tax Season — AARP (2026-03-31)
- State Individual Income Tax Rates and Brackets, 2026 — Tax Foundation (2026-02-17)
Educational content only, not tax, legal or investment advice. Plans and tax laws change; confirm details with your employer's plan documents or your state revenue department. Smart Financial Lifestyle is not affiliated with any employer named on this site.