Line 16: Pensions and Annuities

Line 16 of the IT-201 picks up the taxable pension and annuity amount from your federal return — specifically, the number sitting on Form 1040, line 5b. But here’s where New York gets interesting for retirees: most of that income qualifies for a $20,000 exclusion on line 24. So while you’ll report the full amount here, the state gives a good chunk of it right back a few lines later.

What Goes on Line 16

This line captures the taxable portion of your pension and annuity distributions — the same figure you reported on your federal 1040 at line 5b (IT-201 Instructions, Line 16). If your employer withheld taxes and sent you a 1099-R, that’s the form driving this number. The gross distribution shows in box 1 of the 1099-R, and the taxable amount lands in box 2a.

Don’t confuse this with line 15 (IRA distributions). IRAs get their own line even though they also come on a 1099-R. Pensions from an employer plan — whether it’s a defined benefit pension, a 401(k), a 403(b), or a TSP — belong here on line 16.

Types of Pensions That Land Here

The range is broad. Here’s what you’ll typically see reported on this line:

Government pensions — Federal civil service (FERS/CSRS), state employee pensions, local government retirement systems, teachers’ retirement
Private employer pensions — Traditional defined benefit plans from companies like GE, IBM, AT&T, or any private-sector employer
401(k) and 403(b) distributions — Once you start taking money out, the taxable portion shows here
Thrift Savings Plan (TSP) — Federal employees and military members drawing from their TSP
Annuity payments — Commercial annuities, whether purchased individually or through an employer

Military pensions also appear on this line on your federal return, though New York handles them differently — they’re fully exempt from state tax via a separate subtraction.

The Big Benefit: New York’s $20,000 Pension Exclusion

Here’s what catches most people off guard. New York offers a $20,000 exclusion for qualifying pension and annuity income if you’re age 59½ or older (NY Tax Law § 612(c)(3-a)). That exclusion shows up on line 24, not here — but it directly offsets what you report on line 16.

At a 6.85% state tax rate, that $20,000 exclusion saves you $1,370 every year. For a married couple where both spouses have qualifying pension income, each one gets their own $20,000 exclusion — that’s $40,000 total, saving up to $2,740 in state tax. Not bad.

Government pensions qualify. Private employer pensions qualify. Even 401(k) distributions and IRA withdrawals count toward the exclusion (though IRAs are reported on line 15, they still feed into the line 24 calculation). The one big exception? Social Security doesn’t count here — it gets its own full exemption on line 25.

Common Mistakes on Line 16

The most frequent error: putting the gross distribution instead of the taxable amount. Your 1099-R box 1 might show $48,000, but if $6,000 represents your after-tax contributions (your cost basis), only $42,000 goes on line 5b of the 1040 — and that’s what transfers to IT-201 line 16.

Another mistake is reporting military retired pay here and forgetting that New York subtracts it entirely. If you’re a military retiree, you still put it on this line, but make sure you’re claiming the full subtraction — it’s separate from the $20,000 pension exclusion and has no cap.

Some filers also miss that Roth distributions generally aren’t taxable at all. If your 1099-R shows code Q (qualified Roth distribution), the taxable amount in box 2a should be zero, and nothing hits line 16.

How This Connects to the Rest of the IT-201

Line 16 flows into your total federal income on line 19. From there, New York adds certain items (lines 20-22) and subtracts others (lines 23-28) to arrive at your New York adjusted gross income. The pension exclusion on line 24 is the big one for retirees — it directly reduces what you owe.

Combined with the full Social Security exemption on line 25, New York is actually more retiree-friendly than its reputation suggests. A retired couple collecting $30,000 in Social Security and $50,000 in pensions could subtract $70,000 from their New York income — $30,000 for Social Security plus $40,000 in pension exclusions. That’s a meaningful tax break most people don’t realize exists. For a full view of how these lines fit together, see the IT-201 line-by-line guide.

Sources & References

Frequently Asked Questions

Does my 401(k) distribution go on line 16 or line 15?

401(k) distributions go on line 16. Line 15 is strictly for IRA distributions. Even though both generate a 1099-R, the IRS and New York treat them as different categories. Your 401(k), 403(b), TSP, and traditional employer pension plans all belong on line 16.

Can I claim the $20,000 exclusion if I’m under 59½?

No. The pension and annuity exclusion on line 24 requires you to be at least 59½ years old during the tax year. If you took early retirement at 55 and started drawing a pension, you won’t qualify for the exclusion until you hit 59½. There’s no partial credit for being close.

Are military pensions taxed by New York?

No. New York fully exempts military retired pay from state income tax. You’ll still report it on line 16 (because it’s on your federal return), but you subtract the full amount as a modification. This is separate from the $20,000 pension exclusion — military retirees who also have a civilian pension can claim both.

What if I have pensions from two different employers?

Add them together. Line 16 captures your total taxable pension and annuity income from all sources — it’s one number that matches your federal line 5b. The $20,000 exclusion on line 24 applies to the combined total, not per-pension. You can’t get $20,000 excluded from each pension separately.

Does my spouse get a separate $20,000 exclusion?

Yes, if your spouse has their own qualifying pension or annuity income and is 59½ or older. Each spouse gets up to $20,000. On a joint return, that’s a potential $40,000 exclusion. But each spouse can only exclude up to the amount of their own qualifying income — you can’t shift unused exclusion from one spouse to the other.

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