Dear Harry: I owned a small store in New York for about 10 years. During that time, I had a self-employed pension plan. I moved here a few years ago to be nearer to my family. I have now decided to retire and start collecting on my SS and pensions. I was notified that my pension payments from the New York plan will be subject to New York's income tax even though I am clearly a Pennsylvania resident with no New York connections. I decided to delay collecting that money until I can get you to clarify for me how they can do this. I know that pension payments are not subject to Pennsylvania's income tax. Is there a way out of this for me?

What Harry says: About 12 years ago, Congress tackled a similar problem for those New York employees who were living in other states. They can no longer be taxed by those greedy New Yorkers. More recently, Congress got busy with pension reform and put in a provision that relieves self-employed people the same exemption. The new provision gives a big break to those whose pension contributions were deductible on their state returns to move to another state where the pension withdrawals will not be taxed. That's a neat little double-dip for a good many retirees. *

Write Harry Gross c/o the Daily News, 400 N. Broad St., Philadelphia, PA 19130. Harry urges all his readers to give blood - contact the American Red Cross at 800-GIVE LIFE.