State guide
Does New York tax retirement income? IRAs, Roth conversions and Social Security (2026)
By Secure Retirement PlannerUpdated
If you retire in New York at 59½ or older, you can exclude up to $20,000 a year of pension and IRA income, and Social Security is not taxed. That $20,000 can cover your Roth conversion too. The rest is taxed as income. For 2026, if you are a couple with New York taxable income from $27,900 to $161,550, you pay 5.4% on it.
The state's tax guidance says this $20,000 pension and annuity exclusion covers conversion income. But the $20,000 is per person, and it is shared with your other pension and IRA income. So yours may already be used up. If you live in New York City, you also pay city income tax of 3.078% to 3.876% on the conversion.
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The short version
- If you are 59½ or older, New York lets you exclude up to $20,000 of pension, annuity and IRA income, including conversions.
- Your $20,000 covers all your qualifying income together. If your pension or IRA withdrawals already use it, your conversion gets none.
- If you are a couple, 2026 New York taxable income from $27,900 to $161,550 is taxed at 5.4%.
- If you live in New York City, you pay city tax too. If you live in Yonkers, you pay a surcharge.
- If you leave New York, a conversion you do after you become a nonresident is not New York source income.
Does New York tax retirement income?
Partly. New York does not tax your Social Security or your New York or federal government pension. If you are 59½ or older, you can also exclude up to $20,000 a year of other pension, annuity and IRA income. Anything above that is taxed at the 2026 state rates, plus city tax if you live in New York City.
| Income type | Taxed by New York in 2026? | Notes |
|---|---|---|
| Social Security | No | Subtracted when you figure New York income |
| Public pensions | No, for New York and federal pensions | Subtracted in full at any age. For another state's government pension, check with a state tax preparer |
| Private pensions | Partly | Up to $20,000 excluded at 59½ or older, shared with IRA income |
| IRA and 401(k) withdrawals | Partly | IRA withdrawals share the same $20,000 exclusion. For 401(k) payouts, check with a state tax preparer |
| Roth conversions | Partly | Can use any exclusion room left at 59½ or older. Under 59½, fully taxed |
Does New York tax a Roth conversion?
Yes. The state Tax Department says New York follows the federal rules for Roth IRAs in every way. So the part of your conversion that is taxable federally is in your New York income too.
Your break is the pension and annuity exclusion. When you convert a traditional IRA to a Roth IRA, you can exclude up to $20,000 of it. You must be 59½ at the time. The Tax Department says so in memo TSB-M-98(7)I.
If you are under 59½, you get no exclusion and your full conversion is taxed. If you turn 59½ during the year, the exclusion only covers income you get on or after that date.
How does the $20,000 exclusion work with my other retirement income?
Your $20,000 is a yearly cap on all your qualifying pension and annuity income combined. That includes IRA withdrawals, RMDs, private pensions and annuity payments. Your conversion only gets whatever room is left.
You and your spouse each have a separate $20,000, whether you file jointly or separately. But the Tax Department says you can't use any unused part of your spouse's exclusion. So the exclusion follows whose IRA you convert.
New York State, local government and federal government pensions are different. They are fully subtracted at any age, apart from the $20,000. So if you are a retired New York teacher or federal worker, you often still have your full $20,000 for an IRA conversion.
A common planning move
Say one of you has a large private pension and the other has an IRA with no withdrawals yet. Converting from the second spouse's IRA can use an exclusion that would otherwise go to waste.
What are New York's 2026 tax rates for a couple?
These are the 2026 New York State rates if you are married filing jointly, from Form IT-2105-I. Your taxable income is your New York adjusted gross income (NYAGI) minus the $16,050 standard deduction.
| NY taxable income over | But not over | Rate |
|---|---|---|
| $0 | $17,150 | 3.90% |
| $17,150 | $23,600 | 4.40% |
| $23,600 | $27,900 | 5.15% |
| $27,900 | $161,550 | 5.40% |
| $161,550 | $323,200 | 5.90% |
| $323,200 | $2,155,350 | 6.85% |
| $2,155,350 | $5,000,000 | 9.65% |
| $5,000,000 | $25,000,000 | 10.3% |
| $25,000,000 | and up | 10.9% |
How much more do New York City and Yonkers residents pay?
If you live in New York City, you pay city income tax on top of state tax. For 2026, if you file jointly, you pay 3.078% on the first $21,600 of city taxable income. That rises to 3.876% above $90,000. Most conversions land in the 3.819% or 3.876% bands.
If you live in Yonkers, you pay a surcharge equal to 16.75% of your New York State tax. If you don't live in the city or Yonkers, you don't pay these on a conversion. Their nonresident taxes apply only to wages and self-employment income.
| NYC taxable income over | But not over | Rate |
|---|---|---|
| $0 | $21,600 | 3.078% |
| $21,600 | $45,000 | 3.762% |
| $45,000 | $90,000 | 3.819% |
| $90,000 | and up | 3.876% |
What if I leave New York, and when do I pay estimated tax?
Many people plan to move before they convert. In the year you move, a conversion while you live in New York is New York source income. A conversion after you become a nonresident is not, according to TSB-M-98(7)I. You file as a part-year resident (Form IT-203). New York still uses your full-year income to set the rate on your New York months, so the details matter. See Florida for the move-first approach.
You must pay estimated tax if you expect to owe at least $300 after withholding and credits. That counts New York State, New York City and Yonkers tax. The 2026 due dates are April 15, June 15 and September 15, 2026, and January 15, 2027.
New York doesn't tax the Social Security in your federal income. To see the federal cost of your conversion, use Roth conversion tax calculator.
Example: a Rochester couple, with and without the exclusion
Mary, 63, and Tom, 61, file jointly and haven't started Social Security. Tom has a $70,000 private-company pension, which uses his own $20,000 exclusion. Mary has an IRA she hasn't touched. They convert $50,000 from Mary's IRA in 2026.
Their federal taxable income goes from $37,800 to $87,800, all at 12%. That's about $6,000 in federal tax.
Mary is over 59½ and has no other pension or IRA income, so $20,000 of her conversion is excluded. Their NYAGI rises from $50,000 to $80,000, and New York tax rises about $1,620. If Mary's exclusion were already used by IRA withdrawals, NYAGI would be $100,000. The added tax would be about $2,700.
If they lived in New York City, the city tax would add about $1,139 with the exclusion or about $1,903 without.
What this means for you: before you convert, check which spouse still has unused exclusion room, and convert from that spouse's IRA first.
| Federal tax | NY State tax | NYC tax (if city residents) | |
|---|---|---|---|
| Mary's $20,000 exclusion available | about $6,000 | about $1,620 | about $1,139 |
| Mary's exclusion already used | about $6,000 | about $2,700 | about $1,903 |
Hypothetical example. Assumes married filing jointly, both under 65, no Social Security, the 2026 federal standard deduction ($32,200) and brackets (IRS Rev. Proc. 2025-32), and the 2026 New York standard deduction ($16,050) and rate tables from IT-2105-I. NYAGI stays under $107,650, so no rate phase-out applies. NYC credits are not included. Your numbers will differ.
Common questions
Does New York tax Roth conversions?
Yes. But if you're 59½ or older at the time, you can exclude up to $20,000 of it. Subtract any of the exclusion your other pension or IRA income already used.
Can my spouse's unused $20,000 cover my conversion?
No. You and your spouse each get a separate $20,000, and you can't claim any unused part of your spouse's exclusion.
Does New York tax Social Security?
No. The Social Security in your federal income is subtracted when you figure New York adjusted gross income.
Do NYC residents pay city tax on a Roth conversion?
Yes. If you live in the city, you pay New York City income tax on it, at 3.078% to 3.876% for 2026. If you only work in the city, you don't.
If I convert after moving out of New York, is it taxed?
A conversion after you become a nonresident is not New York source income, according to TSB-M-98(7)I. A conversion before you move is.
Are qualified Roth withdrawals taxed in New York later?
No. New York follows the federal Roth rules, so your qualified withdrawals aren't in New York income.
I have a New York government pension. Does that use up my $20,000?
No. New York State, local and federal government pensions are subtracted in full on their own. So your $20,000 is still there for other income like an IRA conversion.
Sources
Facts on this page were last checked on November 9, 2026.
- NYS Tax Department, TSB-M-98(7)I, New York Tax Treatment of Roth IRAs (Dec 24, 1998) · Conformity, $20,000 exclusion on conversion income, part-year and city rules. Read Nov 9, 2026.
- NYS Tax Department, Information for retired persons · Pension and annuity exclusion rules, spouse rule, government pensions, Social Security. Read Nov 9, 2026.
- NYS Tax Department, 2026 Form IT-2105-I · 2026 NYS and NYC rates, standard deduction, Yonkers surcharge, $300 rule, due dates. Read Nov 9, 2026.
- NYS Tax Department: Nonresident and part-year resident FAQs · Residency tests. Read Nov 9, 2026.
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments) · 2026 federal brackets and standard deduction. Read Nov 9, 2026.
Who wrote this
This guide was written and fact-checked by the Secure Retirement Planner editorial team using IRS, CMS and Social Security sources listed above. We update guides when the law or yearly limits change. How we research.