Retirement plan contributions are usually made with pre-tax dollars, so federal and New York State income taxes are deferred until you begin taking withdrawals.

No income taxes are due on contributions and earnings until the money is withdrawn, but because these plans are intended primarily for retirement, you can generally withdraw funds only after termination of employment or age 59 ½ (subject to plan rules). If you withdraw funds before age 59 ½, they may be subject to an additional 10% early-withdrawal penalty.

For additional information and guidance, contact your tax advisor.