Unfortunately, your distributions will be taxable to NY State and City by virtue of your reisdency status. However, you may exclude some or all of the income if your distributions meet certain requirements.

In NY if you are older then age 59 and 1/2 as of the beginning of the tax year, you are entitled to exclude from income up to $20,000 annually (both you and spouse if you file jointly) of qualified pension and annuity income.

Qualifying pension and annuity income includes: (1) periodic payments for services you performed as an employee before you retired; (2) periodic and lump-sum payments from an IRA, but not payments derived from contributions made after you retired; (3) periodic distributions from government (IRC section 457) deferred compensation plans, after December 31, 2001; (4) periodic distributions from an annuity contract (IRC section 403(b)) purchased by an employer for an employee and the employer is a corporation, community chest, fund, foundation, or public school; (5) periodic payments from an HR-10 (Keogh) plan, but not payments derived from contributions made after you retired; (6) lump-sum payments from an HR-10 (Keogh) plan, but only if federal Form 4972 is not used. Do not include that part of your payment that was derived from contributions made after you retired; (7) periodic distributions of benefits from a cafeteria plan (IRC section 125) or a qualified cash or deferred profit-sharing or stock bonus plan (IRC section 401(k)), but not distributions derived from contributions made after you retired.

The bottom line is that the payments you receive will qualify for this exclusion. since TIAA-CREF retirement accounts are considered to be qualifed plans. Accordingly, distributions are excludable up to the limits discussed above. You claim the eclusion via an adjustment to your NY taxable income on line 28 of form 201 ( http://www.tax.state.ny.us/pdf/2004/fillin/inc/it201_2004_fill_in.pdf). The instructions for this form are at http://www.tax.state.ny.us/pdf/2004/inc/it201i_2004.pdf, where you should look at page 24 for the instructions for line 28.

Please also note that any social security benefits you receive that are taxable for Federal tax purposes are excluded for NY state and city tax purposes. You reduce your NY taxable income by claiming a subtraction on line 26 of form 201 equal to the amount of social security benefits that were Federally taxable.

Let me know if you have any additional questions.