A New York State ALJ has sustained a notice of deficiency asserting New York State personal income tax on interest income received by a government retiree on retroactive pension benefits that were found due and owing pursuant to a class-action settlement. Matter of Jerry & Rikki Weiner, DTA No. 827337 (N.Y.S. Div. of Tax App., Mar. 8, 2018). While Tax Law § 612(c)(3)(i) specifically provides that a taxpayer’s federal gross income is reduced by the amount of certain pension income for New York personal income tax purposes, that reduction applies only to the actual amounts of the pension payments, and not to the interest that was paid in this case when the income in question was retroactively determined to have been properly included in pension payments.