Yes, in most cases
New York taxes a required minimum distribution as ordinary income because the state return starts from federal adjusted gross income, which already carries the withdrawal.
Key takeaways
The pension/annuity exclusion
Age 59½ or older for the whole tax year, with "qualified" income, can subtract up to $20,000 from New York taxable income — even though the federal bill stays the same.
Deadlines that shape the bill
The first RMD is due April 1 the year after turning 73; every year after that, December 31. Stacking two distributions into one year can push up the tax bill.
An RMD is due whether you need the money or not — the New York subtraction is not automatic.
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The basics
Yes — a required minimum distribution counts as New York income
Yes — in most cases. In the case of withdrawing a required minimum distribution from a tax-deferred retirement account, New York treats that money as taxable income.
New York uses the federal adjusted gross income as the base. The number flows right onto the state return as the IRS lists RMDs as ordinary income. Taxpayers pay tax on it unless a specific state subtraction applies.
01The NY subtraction
Can New York lower the amount on the state return?
Sometimes. Taxpayers may satisfy qualification for the pension and annuity income exclusion. In order to get this benefit, you must be age 59½ or older for the entire tax year & the income must be "qualified." This subtraction lowers the New York taxable income — even though the federal tax bill remains unchanged.
Worked example: a $30,000 RMD with the exclusion applied
RMD you received
$30,000
NY pension/annuity exclusion (max)
$20,000
Still included in NY income
$10,000
The $20,000 exclusion is per person, per year, and only applies once the account owner is 59½ or older for the entire tax year and the income is “qualified.” It lowers the New York number only — the federal AGI, and the federal tax computed on it, stay the same.
02Which accounts
Which accounts usually generate RMD income?
These rules apply mainly to tax-deferred accounts as exemplified below:
Traditional IRAs — plus SEP and SIMPLE IRAs
Employer plans like 401(k) & 403(b)
Many governmental 457(b) plans
03Deadlines
When is the first RMD due?
For IRAs, you should take the first withdrawal by April 1 of the year after turning 73. For all following years, the deadline is December 31. Specific workplace plans allow you to wait until you retire, yet you need to check the plan rules.
April 1
First RMD deadline — the year after you turn 73
Dec 31
Deadline for every RMD after the first
Check the plan
Some workplace plans let you wait until you retire
04Avoid the stack
How can you prevent a bigger New York tax bill?
The calendar year for the income should be planned carefully. If you wait until April 1 to take the first RMD, you will have to take a 2nd one by December 31 of that same year. 2 distributions in 1 year push the income up — which could result in a higher tax bill.
Take the first RMD by December 31
One distribution lands in this year’s income. Nothing else about the calendar year changes.
Defer the first RMD to April 1
The deferred RMD is still taken by April 1 — but the second RMD for that same year is due by December 31. 2 distributions in 1 year push the income up, which could result in a higher tax bill.
05Missed a deadline
What if you miss an RMD deadline?
The IRS charges an excise tax on the amount you failed to withdraw — generally 25%. This rate may be lower in the case of fixing the mistake quickly & filing the correct form. New York does not charge this specific federal penalty payment. Yet the late withdrawal will still show up as income on the state return when you finally take it.
25%
IRS excise tax on the amount not withdrawn
Lower
If the shortfall is fixed quickly and the correct form is filed
No NY penalty
But the late withdrawal still counts as NY income when it is finally taken
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Contact Dimov NYC CPA for RMDs
Get the New York subtraction applied correctly
If you need a solution that satisfies your residency situation & exact accounts, reach out to Dimov NYC CPA. Our team can confirm deadlines, apply the right New York subtraction and set up withholding parallel to your filing plan.
Reviewed by George Dimov, CPA, New York, NY. Serving clients in all 50 states, 15+ years advising on retirement distribution planning and New York state tax subtractions. President of George Dimov, CPA, a New York City firm serving clients across the five boroughs and nationwide.