Money in Your Pockets: Governor Hochul Kicks Off 2026 With Affordability Agenda, New Tax Relief Efforts and Increased Wages

With the new tax year beginning January 1, 2026, Governor Kathy Hochul is informing New Yorkers about a number of tax relief and affordability measures that will begin in the New Year. The Governor is also announcing that in her upcoming FY2027 Executive Budget proposal, she will put forth legislation that eliminates state income taxes on up to $25,000 of tipped income in tax year 2026, which follows federal guidance. This effort is a continuation of the Governor's Affordability Agenda. Since taking office, the Governor has advanced policies that have put over $9 billion back in the pockets of New York households through tax relief efforts.

"As we welcome in the New Year, affordability remains my top priority and I am doubling down on my commitment to put money back in New Yorkers' pockets," Governor Hochul said. "Starting today, tax rates for the vast majority of lower and middle-class New Yorkers will be cut, families with children will see a sweeping increase in the child tax credit, and minimum wage workers across the state will see their wages go up. I'm kicking the new year off with a proposal of no state income tax on tips, continuing my efforts to make New York more affordable for hard working New Yorkers."

Over the last 5 years, the costs on everyday essentials like groceries, insurance, utility bills, and goods and services has increased significantly, and Governor Hochul has heard directly from New Yorkers how difficult it can be to make ends meet. As a result, the Governor created her Affordability Agenda, which has delivered over $9 billion in tax relief to New York's individuals and families since taking office. This most recent proposal of No Tax on Tips, is the latest in a series of efforts to put money back in New Yorkers pockets.

Middle Class Tax Cuts
In the FY 2026 Enacted Budget, Governor Hochul secured a middle class tax cut, which, beginning January 1, 2026, will deliver nearly $1 billion in tax relief to more than 8.3 million New Yorkers. This will provide savings to taxpayers earning up to $323,000 for joint filers. When fully phased in, the middle class tax cut will deliver hundreds of dollars in average savings to nearly 77 percent of filers - representing three out of every four taxpayers.

Sweeping Increase in Child Tax Credit
In the FY2026 Enacted Budget, Governor Hochul continued her efforts to expand New York's child tax credit, providing critical financial support for more than 2.75 million children statewide. This latest expansion doubled or in many cases, tripled the current credit, offering up to $1,000 annually per child under four and up to $500 per child aged four to 16. This latest expansion marked the largest increase in the credit's history, significantly surpassing the previous maximum of $330 per child. The expansion will be phased in over two years, with New Yorkers receiving expanded benefits starting in 2026 for children under four and extending to older children in 2027.

Increasing the Minimum Wage
Included in the FY2024 Enacted Budget, Governor Hochul created a transformative plan to help low-wage New Yorkers keep up with the rising costs of living by increasing New York's minimum wage for three years and tying future increases to inflation. Beginning January 1, 2026, New York State's minimum wage increased to $17.00 per hour in New York City, Westchester, and Long Island, and $16.00 per hour in the rest of the state. Starting in 2027, the minimum wage will increase annually at a rate determined by the Consumer Price Index for Urban Wage Earned and Clerical Workers (CPI-W) for the Northeast Region - the most accurate regional measure of inflation.

Governor Hochul's Affordability Agenda
This announcement builds on Governor Hochul's Affordability Agenda which delivered a $2B Inflation Refund program, delivering up to $400 to over 8.2 billion New Yorkers, and universal free school meals, saving parents and families up to $1,600 a year.

Contact the Governor's Press Office