Exempt
Taxable
(except previously taxed contributions)
If you move, your benefit is subject to that state's tax laws.
Handbook p. 45; Retired Members' Handbook p. 8; Compilation of Laws 2026, Introduction; 2026 Benefit Profile insert p. 2
Is a NYSTRS pension taxable?
Yes for federal income tax, no for New York. Your NYSTRS benefit is exempt from New York State income tax and municipal tax under Section 524 of the Education Law, but the IRS taxes it, except the part that comes from contributions you already paid tax on. If you move, your new state's rules apply.
Which of your contributions count as already taxed depends on your tier (see below). The gross benefit on your 1099-R depends on the payment option you pick. To see the gross amount you'd be taxed on, run the calculator (a Tier 4 example is filled in).
What NYSTRS says
- Your NYSTRS retirement benefit is exempt from New York State income tax but subject to federal income tax (except previously taxed contributions). If you move, it is subject to your new state's tax rules.Handbook p. 45; Retired Members' Handbook p. 8
- Member contributions are subject to NY State income tax when made. For federal tax, Tier 5 and 6 contributions (and Tier 3-4 contributions after July 1, 1989) are taxed when paid out.Handbook p. 14
- The exemption is in state law: under Section 524 of the Education Law, NYSTRS benefits are exempt from New York state income and municipal tax, and can't be garnished or assigned.Compilation of Laws 2026, Introduction
- You choose your federal withholding when you apply to retire, on the W-4P Withholding Certificate (FIN-149.1). You can have federal tax withheld from each monthly payment or none, in which case you pay the IRS directly. Change it any time in MyNYSTRS or with a paper W-4P; a change received by the 12th generally shows in that month's payment.Handbook pp. 43, 45; Retired Members' Handbook p. 8
- Each January NYSTRS sends a 1099-R listing your gross benefit, the taxable amount, and any federal tax withheld for the previous calendar year. MyNYSTRS account holders can see three years of 1099 statements online. Your Retired Member Profile is not meant for tax reporting.Retired Members' Handbook pp. 3, 8; Handbook p. 45
- If you become a resident of another state, your benefit is subject to that state's tax rules. NYSTRS points retirees to rpea.org for other states' tax laws.Retired Members' Handbook p. 8
This site doesn't give tax advice. For withholding and your own situation, ask NYSTRS or a tax professional.
Questions
Does New York tax my NYSTRS pension?
No. NYSTRS benefits are exempt from New York State income tax and from municipal tax.
Is it taxed by the IRS?
Yes, except the part that comes from contributions that were already taxed.
What if I move to another state?
Your pension is then subject to that state's tax laws. NYSTRS points retirees to rpea.org for other states' rules.
How do I change my federal withholding?
File a new W-4P in MyNYSTRS or on paper. A change received by the 12th of the month generally shows in that month's payment.
When do I get my tax form?
NYSTRS sends a 1099-R each January for the previous calendar year.
Related: Social Security and NYSTRS, retiree health insurance, and working after retirement.
Source: NYSTRS Active Members' Handbook, Updated October 2026, pp. 14, 43, 45. Also: Retired Members' Handbook pp. 3, 8; Compilation of Laws 2026 Introduction; 2026 Benefit Profile insert p. 2. Last reviewed .