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January 5, 2023
Question

I get a disability pension from NYS. I was told I not get a 1099R. I called NYS retirement system they said my disability pension isn't taxable I won't get a 1099R.

  • January 5, 2023
  • 3 replies
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3 replies

rjs
Employee
January 5, 2023

Do you have a question?

 

Employee
January 5, 2023

I'm not actually sure that's correct.  Disability payments you earned from working would be taxable if you did not pay the premiums yourself out of pocket.  In other words, if you paid the premiums with pre-tax deductions, or your employer paid the premiums tax-free to you, then it should be taxable income.  For the first year of disability, it is considered earned income subject to social security and medicare tax, then from the second year onward, it is unearned income and you don't pay social security or medicare tax but you do pay income tax.

 

It might be tax-free for New York State income tax purposes, if they passed a special law exempting state employee benefits from state tax, but I believe it will still be taxable federal income.  

 

I would need to see citations from the tax law to be proven otherwise.  

April 10, 2024

I was told the exact same thing from NYSLRS. In years past I did receive a 1099-R indicating no federal taxes withheld. Do not know why they no longer send out a 1099-R?

DaveF1006
April 10, 2024

According to Turbo Tax in it's help article, after you reach the minimum retirement age, your taxable disability pension is treated as a pension and doesn't count as earned income thus NYS is correct. 

 

It was taxable in the past but no longer since you reached the minimum retirement age.

 

@Stacks21 

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