N.Y. Comp. Codes R. & Regs. tit. 20 § 132.20
If a pension or other retirement benefit does not qualify as an annuity under section 132.4(d) of this Part, and is attributable to services performed wholly within New York State, the entire amount included in the individual's Federal adjusted gross income is likewise includible in his New York adjusted gross income. If the pension or other retirement benefit is attributable to services performed wholly outside New York State, no part of the amount received is includible in the individual's New York adjusted gross income. Where the employee's services were performed partly within and partly without New York State, the amount includible in the individual's New York adjusted gross income is the proportion of the amount included in the individual's Federal adjusted gross income which the total compensation, received from the employer for the services performed in New York State during a period consisting of the portion of the taxable year prior to retirement and the three taxable years immediately preceding the retirement, bears to the total compensation received from the employer during such period for services performed both within and without New York State. For purposes of this section, the compensation for services performed within New York State must be determined separately for each taxable year or portion of a year in accordance with the applicable provisions of section 132.17, 132.18 or 132.19 of this Part. A determination of the portion of a pension or other form of deferred compensation attributable to New York State on the basis of a period of time greater than the period referred to above may be made if the individual establishes, to the satisfaction of the Tax Commission, the amount of his total yearly compensation for a longer period of time and the amount allocable to New York State in each year in accordance with the applicable provisions of sections 132.17 through 132.19 of this Part. (For taxability of pensions and other retirement benefits in general, see section 132.4[d] of this Part.)
Example:
A, a nonresident of New York State, performs services both within and without New York State for a corporate employer under an employment contract whereby for each year's services he is to receive a salary of $40,000 during the period of employment and an additional $100,000 payable in 10 equal annual installments commencing after his employment terminates. A terminates his employment on July 1, 1977, when he is 50 years of age and his life expectancy is 25.5 years. Since the payments are not to run for at least one half of A's life expectancy, they do not qualify as an annuity under section 132.4(d) of this Part. Assuming that the New York State percentages for allocating his salary were 50 percent for 1974, 60 percent for 1975, 75 percent for 1976, and 40 percent for the first half of 1977, the portion of additional payments to be included in New York adjusted gross income would be computed as follows:
| Total compensation | New York portion | ||
| 1974 | $ 40,000 | (50%) | $20,000 |
| 1975 | 40,000 | (60%) | 24,000 |
| 1976 | 40,000 | (75%) | 30,000 |
| 1977 (6 months) | 20,000 | (40%) | 8,000 |
| Totals | $140,000 | $82,000 | |
$82,000/$140,000 × $10,000 = $5,857.14 includible annually in A's New York adjusted gross income.
N.Y. Comp. Codes R. & Regs. Tit. 20 § 132.20