In an early push to address financial burdens on New Yorkers, Governor Kathy Hochul has hit the ground running with a set of tax relief measures and wage increases to kick off 2026. As outlined by the Governor's Office, the plan includes axing state income taxes on tipped income up to $25,000, a move aligning with federal standards. Hochul has promised to bring this legislation to the table in her upcoming FY2027 Executive Budget proposal, contributing to what she calls her Affordability Agenda—an initiative that's already pumped over $9 billion back into the pockets of state residents.
“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 announced. The fiscal shake-up means lower and middle-class citizens will see reduced tax rates starting today, a sweeping increase in the child tax credit, and a raise to the minimum wage for the state's lower-income workers. These steps come as prices for groceries, insurance, and other daily necessities have jumped, a trend that's put a significant strain on household finances. Hochul's Affordability Agenda is posed as an ongoing response to the cries for relief from New Yorkers who've found making ends meet increasingly challenging, as per the Governor's Office.
When it comes to the middle class, the cuts are substantial. The FY 2026 Enacted Budget heralds nearly $1 billion in tax relief for more than 8.3 million New Yorkers—with taxpayers earning up to $323,000 for joint filers seeing savings. Once fully realized, about 77 percent of filers should be pocketing several hundred dollars extra each year.
On the family front, a groundbreaking expansion of New York's child tax credit will mean more dollars for parents. More than 2.75 million children across the state are set to benefit from an increase in the credit, with amounts reaching up to $1,000 per child under the age of four and $500 for those aged four to 16. This phased-in approach will begin in 2026 for the younger children and extend to older ones in 2027, making for the largest hike in the credit's history.
Minimum wage workers aren't left out in the cold either. A plan hatched in the FY2024 Enacted Budget has set in motion an uptick in wages that sees $17.00 per hourly pay become the new norm in New York City, Westchester, and Long Island, with a $16.00 rate for the rest of the state. And from 2027 onwards, those rates will climb in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Northeast Region. This index reflects the most accurate regional measure of inflation, presumably to help wages keep pace with the rising cost of living.
Building upon her existing agenda, Governor Hochul’s office touts the successes of prior programs, such as the $2B Inflation Refund that handed up to $400 to over 8.2 billion New Yorkers. Moreover, the introduction of universal free school meals cuts costs for parents and families by up to $1,600 a year, as part of the ongoing effort to alleviate financial pressures on New Yorkers.
