NYCERS’ benefit payments are subject to Federal taxes but are exempt from New York State and local income taxes. NYCERS benefits may be subject to state and local income taxes in states other than New York. Taxes are automatically withheld from all benefit checks you receive from NYCERS based on the Federal tax table for a person who is married claiming three exemptions, unless you elect in writing to have taxes withheld on a different basis, or for no taxes to be withheld.

Even though your monthly retirement benefit is subject to Federal income taxes, part of it may be excludable. Contributions you made to NYCERS on a pre-tax basis are considered 414(h) Contributions. Non-414(h) Contributions were deducted from your paychecks after tax and are therefore not subject to taxation a second time. The portion of your retirement benefit that represents Non-414(h) Contributions is exempt from Federal taxes.