In what could be called a New York state of mind, Congress passed into law H.R. 4019, signed by the President on August 3, which amends a 1996 federal law that bars the states from taxing certain retirement income received by non-residents. Retirement income was defined to include income from both qualified retirement plans and non-qualified deferred compensation plans.
Not exactly, said New York which took the position that the law did not prevent the state from taxing non-qualified retirement benefits paid by a partnership to its retired non-resident partners. The law, New York said, only applied to employees and not partners.
Not now. The new law is retroactive for amounts received after December 31, 1995. Amended tax returns may be in order.