Key Takeaways
- The Bedford Town Board is considering two amendments to the senior citizens property tax exemption. A continued public hearing is scheduled for April 7, 2026 at 6 PM.
- One change would expand relief for the lowest-income seniors, adding exemption tiers up to 65% of assessed value.
- The other would count traditional IRA distributions as income when determining exemption eligibility, potentially disqualifying some seniors who currently receive the benefit.
- If adopted, the IRA change would take effect for the 2027 assessment cycle, making 2026 income the relevant year. That creates a planning window right now.
The Bedford Town Board held a public hearing on March 17, 2026 to consider amendments to Chapter 110-4 and 110-5 of the Town Code, the sections that govern the senior citizens property tax exemption. The hearing will continue at the April 7 Town Board meeting at 6 PM at Town Hall, 321 Bedford Road in Bedford Hills. The proposed changes would affect eligible seniors across all three hamlets: Bedford Hills, Bedford Village, and Katonah.
The Town Board is considering two changes. Both stem from recent amendments to New York State Real Property Tax Law §467. One is a straightforward expansion of relief for the lowest-income seniors. The other could meaningfully change how retirement income affects exemption eligibility, and it deserves close attention from anyone drawing on a traditional IRA.
How Bedford’s senior property tax exemption works today
Bedford currently offers a sliding-scale exemption that reduces the taxable assessed value of a qualifying senior’s home. To be eligible, at least one owner must be 65 or older, and total household income must fall below the thresholds set in the Town Code. At the top of the scale, seniors earning under $50,000 receive a 50% reduction in assessed value.
Given that median property tax bills in Bedford exceed $20,000, even a partial exemption represents meaningful savings. Losing it, or dropping to a lower tier, can add hundreds or even thousands of dollars to an annual tax bill.
Why the state changed the rules in 2023
The 2023-2024 state budget overhauled how income is calculated for the §467 exemption. Before that change, income was defined through a detailed, category-by-category formula. The new definition starts with Federal Adjusted Gross Income (FAGI) and applies a short list of adjustments.
One of those adjustments matters a great deal here. Under the default state rule, taxable IRA distributions included in FAGI are deducted from the income calculation. In other words, the state assumes your IRA withdrawals don’t count unless your municipality says otherwise. The state also gave municipalities an explicit local option to stop deducting them.
In December 2025, Governor Hochul signed legislation (S5175A/A3698A) that allows localities to offer exemptions of up to 65% of assessed value, up from the previous ceiling of 50%.
Both of these state-level changes set the stage for what Bedford is now considering.
A closer look at the two proposed changes
Expanding the exemption for seniors with lower incomes
Bedford’s current exemption tops out at 50% of assessed value for seniors earning under $50,000. The proposal would add three new tiers that the state has now authorized: 55% for income under $49,000, 60% for under $48,000, and 65% for under $47,000.
According to the Town Assessor’s analysis presented at the March 17 hearing, if every current recipient of the 50% exemption qualified for the maximum 65% tier, the town tax rate would increase by roughly $0.03, adding about $2.20 to a typical residential tax bill. This is a modest cost to provide deeper relief to seniors on the tightest budgets.
Counting IRA distributions as income
This is the change with real planning implications. Under the current default rule, taxable IRA distributions included in your FAGI are deducted from the income used to determine your exemption level. The proposed amendment would exercise the local option authorized by state law to stop deducting them. It would effectively add IRA withdrawals back into the calculation.
Several other Westchester municipalities have already adopted this option. The reasoning is straightforward: the original exclusion treated IRA distributions differently from pensions, even though both serve as retirement income. The state gave municipalities the explicit choice to align the treatment.
If approved, this change would take effect starting with the 2027 assessment cycle. Because Bedford’s taxable status date is June 1, the town uses the most recently completed calendar year as the applicable income year. That means 2026 income would determine eligibility for the 2027 roll.
How the IRA change could affect a Bedford senior
Consider a senior homeowner with $36,000 in Social Security benefits (of which roughly $18,000 is nontaxable), $6,000 in pension income, and $15,000 in traditional IRA withdrawals.
Under the current rule, that $15,000 IRA distribution is deducted from the income calculation. The senior’s countable income stays well below the $50,000 threshold and qualifies for the full 50% exemption.
Under the proposed rule, the IRA withdrawal counts. Depending on exactly how the other adjustments work out, this senior’s income could jump above the threshold, reducing or eliminating the exemption entirely.
With median property tax bills in Bedford exceeding $20,000, the difference between a 50% exemption and no exemption could mean more than $10,000 a year. Even a shift from 50% to a lower tier on the sliding scale can translate to several hundred dollars.
Planning considerations if this change moves forward
The window between now and when 2026 income gets measured is the moment to evaluate options. Here are several strategies worth exploring with a financial planner.
Roth conversions before the effective date
Converting traditional IRA assets to a Roth IRA means future withdrawals will not appear as taxable income on your Form 1040 and will not affect FAGI. There is a current-year tax cost, since the conversion amount counts as taxable income in the year you convert. But if preserving your property tax exemption for years to come saves thousands annually, the math can work strongly in your favor.
The key is timing. Converting in 2026 lets you absorb the tax hit before the new income calculation takes effect for the 2027 roll.
Qualified Charitable Distributions
For seniors age 70½ and older who give to charity, Qualified Charitable Distributions (QCDs) may be the single most powerful tool available. A QCD goes directly from your IRA to a qualifying charity. It satisfies your Required Minimum Distribution without appearing as taxable income on your Form 1040.
Because the state law’s IRA option specifically targets taxable IRA distributions included in FAGI, QCDs should remain invisible to the income calculation even under the proposed rule. For charitably inclined seniors, this checks three boxes at once. You meet your RMD obligation, support the causes you care about, and preserve your exemption eligibility.
Withdrawal sequencing
Where you draw living expenses from matters. Pulling from taxable brokerage accounts or Roth IRAs instead of traditional IRAs keeps FAGI lower. This kind of sequencing decision is exactly where thoughtful retirement income planning pays off, and it is something we help clients think through as part of building a retirement income strategy grounded in their full financial picture.
RMD awareness
Once Required Minimum Distributions begin at age 73, flexibility shrinks. Those distributions are mandatory and taxable. Planning before that milestone gives you more room to manage your income levels deliberately. If you are approaching 73 and want to understand how these pieces fit together, a brief conversation is a good place to start.
What Westchester County has been doing
Bedford’s deliberation is part of a broader trend across the county. In 2022, the Westchester County Board of Legislators raised the income ceiling for the senior exemption from $29,000 to $50,000, responding to state legislation that gave them the option. In 2024, County Executive George Latimer signed legislation excluding Social Security income from the adjusted gross income calculation for the county-level exemption.
The direction is clear. Municipalities across Westchester are making deliberate, localized choices about how these exemptions work. Regardless of what Bedford decides on April 7, building IRA distribution planning into your retirement income strategy is a prudent step.
What to do next
The continued public hearing takes place on April 7 at 6 PM at Bedford Town Hall (321 Bedford Road, Bedford Hills). If this issue affects you or someone in your family, showing up matters. Whether you live in Katonah, Bedford Village, or Bedford Hills, your voice counts at the hearing
You can also contact the Bedford Assessor’s office at 914-666-5149 to check your current exemption status and understand how the proposed changes would apply to your situation.
And if you want to understand how your current IRA withdrawal strategy interacts with exemption eligibility, and whether adjustments before 2027 could make a difference, we are happy to help. Our wealth management approach means we think about investments, taxes, and retirement income as one connected picture, not separate problems. Start with four quick questions to see if we might be a good fit.
Bedford property tax exemption FAQ
What is Bedford's senior property tax exemption?
Bedford offers a sliding-scale property tax exemption for homeowners age 65 and older with household income below $50,000. The exemption can reduce the taxable assessed value of a qualifying home by up to 50%, with lower percentages available at higher income levels. Homeowners file applications with the Town Assessor by May 1 each year.
Who qualifies for the exemption?
At least one property owner must be 65 or older, and total household income must fall below the thresholds set in the Town Code. The property must be the owner’s primary residence, used exclusively for residential purposes, and ownership must have been in place for at least 12 consecutive months. The town calculates income starting from Federal Adjusted Gross Income with certain adjustments.
What changes are being proposed to this exemption?
The Town Board is considering two amendments. One would add new exemption tiers at 55%, 60%, and 65% for seniors with the lowest incomes. The other would count taxable IRA distributions as income when determining eligibility, which could reduce or eliminate the exemption for some current recipients. A continued public hearing is scheduled for April 7, 2026 at 6 PM at Town Hall.
How could IRA withdrawals affect eligibility for the exemption?
Under the current default state rule, taxable IRA distributions are excluded from the income calculation. If Bedford adopts the proposed local option, those distributions would count. For seniors who rely on traditional IRA withdrawals for living expenses, this could push their income above the exemption threshold. The change would take effect for the 2027 assessment cycle, based on 2026 income.
When do the proposed changes would take effect?
If adopted, the IRA distribution change would apply starting with the 2027 assessment roll. Because Bedford’s taxable status date is June 1, the income year used is the most recently completed calendar year, meaning 2026 income would determine 2027 eligibility.
Where can I get more information about the proposed changes?
Attend the continued public hearing on April 7 at 6 PM at Bedford Town Hall, 321 Bedford Road, Bedford Hills. You can also contact the Bedford Assessor’s office at 914-666-5149 to check your current exemption status or ask how the proposed changes would affect you.
