Enacted Budget Cuts Taxes for Middle-Class New Yorkers

Governor Kathy Hochul today signed new legislation as part of the FY26 Enacted Budget to put money back in the pockets of millions of New Yorkers. This includes tripling the size of New York’s Child Tax Credit, cutting taxes for middle class New Yorkers, sending inflation refund checks to millions of households and ensuring free school meals for students statewide. These initiatives help address the rising cost of living for families of all sizes and across the income spectrum. When accounting for their collective impact, these policies will deliver nearly $5,000 of relief for many families of five in New York over the coming year and beyond.

“The cost of living is still too damn high, so I promised to put more money in your pockets — and we got it done,” Governor Hochul said. “Putting money back in the pockets of millions of families means helping New Yorkers afford the rising costs of groceries, raising kids, and just enjoying life. When I said your family is my fight, I mean it — and I’ll never stop fighting for you.”

Expanding New York’s Child Tax Credit

The FY 2026 Budget includes Governor Hochul’s plan to give 1.6 million New York families an annual tax credit of up to $1,000 per child under age four and up to $500 per child from four through sixteen. This is the largest expansion of New York’s child tax credit in its history — and it will benefit approximately 2.75 million children statewide. Governor Hochul’s expansion of the credit will double the size of the average credit going out to families from $472 to $943.

This historic expansion of New York’s child tax credit will drive significant assistance to families with the youngest children and help families across the income spectrum. By eliminating a longstanding provision that restricted New York’s poorest families from accessing the credit while also delivering new relief to many middle-class families whose incomes were previously too high to qualify for the credit. As a result, more than 187,000 children will now be newly eligible for the credit.

The revamped credit will be instrumental in helping to address child poverty in New York State, cutting poverty among children statewide by 8.2 percent, and when combined with other measures already advanced by Governor Hochul, including drastically expanding subsidized child care, reducing child poverty by 17.7 percent.

For example, under New York’s newly expanded child tax credit, a family of four with a toddler and school-age child, and a household income up to $110,000, would receive a credit of $1,500 per year — representing nearly $1,000 more per year than what that family receives under the current program. Additionally, the expanded credit means that even a family of four with household income of $170,000 would receive over $500 per year. That family would not have qualified for any credit under the current program.

Cutting Taxes for the Middle Class

The FY 2026 Budget includes Governor Hochul’s plan to cut taxes for more than 75 percent of all tax filers in New York. This huge win will deliver nearly $1 billion annually in tax relief to 8.3 million New Yorkers. This will provide savings to taxpayers earning up to $323,000 for joint filers.

Under this tax cut, nearly 80% of New Yorkers will start to see fewer state taxes taken out in your first payroll check of 2026.

Once the rate change is fully phased in, the middle class tax cut will deliver hundreds of dollars in average savings to three out of every four taxpayers in the state. This will bring taxes for the middle class to their lowest level in 70 years.

Sending Inflation Refund Checks to New Yorkers

While inflation has driven prices higher, sapping the income of New Yorkers, it has also driven sharp increases in the State’s collection of sales tax. Governor Hochul believes that money belongs to hardworking New York families and should be returned to their pockets as an Inflation Refund.

The FY 2026 Budget includes Governor Hochul’s plan to send New York’s first-ever inflation refund checks, which will put $2 billion back in the pockets of over 8 million New York taxpayers. Later this year, New York State will send direct payments to everyday New Yorkers.

Joint tax filers with income up to $150,000 will receive a $400 check, and joint filers with income over $150,000 but no greater than $300,000 will receive a $300 check. Single tax filers with income up to $75,000 will receive a $200 check, and single filers with incomes over $75,000 but no greater than $150,000 will receive a $150 check.

There are no age restrictions. Filers do not need to do anything to receive a refund. If you filed a tax return, are below the income (NYS AGI) thresholds, and no one else claimed you as a dependent, you will receive a refund.

More details regarding the timing for sending inflation refund checks will be announced in the near future.

Free School Meals for New York Students

The FY 2026 Budget includes Governor Hochul’s plan to ensure all of New York’s over 2.7 million students can receive breakfast and lunch for free at school, including roughly 280,000 students who would not otherwise be eligible for free meals. This monumental program will help save parents money, address food insecurity among New York kids, and create more opportunities for students to succeed.

By eliminating any financial requirements to receive this benefit, New York State will level the playing field and give parents back the money they would be spending. Free school meals are estimated to save families $165 per child in grocery spending each month and have been shown to support learning, boost test scores, and improve attendance as well as classroom behavior.