Governor Kathy Hochul joined New Yorkers today to mark a FY 2026 New York State Budget agreement that fulfils all of the Governor’s affordability pledges and will return nearly $5,000 to New York families. The major victories include tripling New York’s Child Tax Credit, lowering taxes for middle-class residents, issuing inflation refund checks directly to millions of households, and guaranteeing free school meals for more than 2.7 million students statewide.
“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 nearly $5,000 back in the pockets 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.”
The Governor’s affordability measures are expected to benefit families of all sizes and income levels. When factoring in the combined effect of every new policy included in the FY 2026 State Budget, the package will provide close to $5,000 in total relief for a family of five in New York.
Expanding New York’s Child Tax Credit
The FY 2026 State Budget agreement incorporates Governor Hochul’s proposal to provide 1.6 million New York families with an annual tax credit of up to $1,000 for each child under age four and up to $500 for each child ages four through sixteen. This marks the largest expansion of New York’s child tax credit in state history and is expected to benefit roughly 2.75 million children statewide. Under Governor Hochul’s plan, the average credit issued to families will double, rising from $472 to $943.
This landmark expansion will deliver meaningful support to families with young children while extending help across the income spectrum. It removes a long-standing rule that prevented New York’s lowest-income families from accessing the credit and also provides new relief to many middle-class households whose earnings were previously too high to qualify. As a result, more than 187,000 additional children will now become eligible for the credit.
The enhanced credit is expected to play a key role in reducing child poverty across New York State, lowering statewide child poverty by 8.2 percent. When combined with other initiatives already advanced by Governor Hochul, including a major expansion of subsidized child care, child poverty is projected to drop by 17.7 percent.
For instance, under the newly expanded child tax credit, a family of four with a toddler and a school-age child and a household income of up to $110,000 would receive $1,500 annually—nearly $1,000 more per year than under the current program. In addition, even a family of four earning $170,000 annually would receive more than $500 per year, despite not qualifying for any credit under the existing system.
Cutting Taxes for the Middle Class
The FY 2026 State Budget agreement also advances Governor Hochul’s plan to reduce taxes for more than 75 percent of all New York tax filers. This major achievement will provide nearly $1 billion in annual tax relief to 8.3 million residents, delivering savings to joint filers earning up to $323,000.
Once the rate reduction is fully phased in, the middle-class tax cut will generate average savings of hundreds of dollars for three out of every four taxpayers statewide. These changes will lower middle-class taxes to their lowest level in 70 years.
Putting nearly $5,000 back in the pockets 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.”
Sending Inflation Refund Checks to New Yorkers
As inflation has pushed prices higher and strained household budgets, it has also led to significant growth in the state’s sales tax revenue. Governor Hochul maintains that this money should be returned to hardworking New York families in the form of an Inflation Refund.
The FY 2026 State Budget agreement includes Governor Hochul’s plan to issue New York’s first-ever inflation refund checks, returning $2 billion to more than 8 million taxpayers across the state. Later this year, New York State will begin sending direct payments to everyday New Yorkers.
Joint filers earning up to $150,000 will receive a $400 check, while those with incomes above $150,000 and up to $300,000 will receive $300. Single filers with incomes up to $75,000 will receive $200, and those earning more than $75,000 but no more than $150,000 will receive $150.
Additional details on the timing of the inflation refund checks will be shared in the coming weeks.
Free School Meals for New York Students
The FY 2026 State Budget agreement also advances Governor Hochul’s plan to guarantee free breakfast and lunch for all of New York’s more than 2.7 million public school students. This major initiative will help families save money, reduce food insecurity among children, and expand opportunities for student success.
By removing income-based eligibility requirements, the state will ensure equal access to this benefit and put money back into parents’ pockets. Free school meals are estimated to save families about $165 per child each month on groceries and have been shown to support learning, improve test scores, and increase attendance while also enhancing classroom behavior.
YMCA of Greater New York President and CEO Sharon Greenberger said, “We applaud the Governor and State Legislature for prioritizing families and children in this year’s budget. Expanding tax credits, issuing rebate checks, and making school meals free will ease financial burdens and support student success. As a trusted community partner, the YMCA of Greater New York sees firsthand the impact that comprehensive support has on families. These investments will go a long way in improving affordability in our State and in New York City.”
United Way of New York City President and CEO Grace Bonilla said, “We commend Governor Hochul and the State Legislature for addressing the pressing needs of New York families and children. From our True Cost of Living report, we know that 50 percent of working-age people in New York City are struggling to make ends meet. That dire need is also demonstrated throughout the State. These changes will ease the burden on people who are already facing untenable challenges – forced to choose between feeding their children or paying bills. As we partner with both government and community-based organizations who keep our city afloat, we know that these critical investments are a crucial part of the solution to complex problems.”
Robin Hood CEO Richard R. Buery Jr. said, “The FY26 budget takes decisive steps to cut poverty through smart policy. By tripling the state’s child tax credit to $1,000 for children ages 0-3 and providing a $500 credit for kids ages 4-16, New York will move five times as many children out of poverty compared to the current policy — and for the first time, nearly 190,000 children from the lowest income families will finally be eligible. With a $2.2 billion investment to preserve access to affordable child care, a free school meals program that will save families an average of $1,600, and a pilot housing voucher program that will give thousands of households a hand in paying rent, Governor Hochul and the legislature have doubled down on a commitment to children, families, and opportunity. I am proud to live in a state where our leaders have the courage and political will to do more than just talk about helping families thrive — but actually make it happen.”
Schuyler Center for Analysis and Advocacy President and CEO Kate Breslin said, “With this year’s budget, New York will make real progress toward the goals of the Child Poverty Reduction Act, which passed – nearly unanimously — and was signed into law in 2021 and committed the state to reduce child poverty by half over a decade, with attention to racial inequity. It directed our leaders to invest with intention, to make considered decisions designed to reduce child poverty. We are grateful New York’s leaders – Governor Hochul, the NYS Senate, and NYS Assembly – are finding consensus to make those concrete, intentional investments, including increasing the amount of the state’s child tax credit and expanding it to those who need it the most. It is estimated that this year’s agreed-upon child tax credit improvements will reduce child poverty by eight percent. Universal free school meals and funding for child care assistance will save New York families money, improve access to healthy meals, and help parents get to work and school. These are important investments in a New York State where every child and family can thrive.”
Leave a Comment