Why are there no taxes withheld for State and Local?
NYCERS’ benefit payments (monthly retirement allowances, loans and excess refunds) are Federally taxed, but are exempt from New York State and local income taxes if your primary residence is within New York State.
If you are not a resident of New York State, you should check with your state tax authority to determine the taxability, if any, of your distribution from NYCERS.