Top 5 Takeaways From New York’s 2026 Budget

The budget was held up for weeks by negotiations.

New York Gov. Kathy Hochul speaks during a press conference at her Manhattan office in New York City, on Feb. 20, 2025. Michael M. Santiago/Getty Images

NEW YORK—Legislative leaders have finally come to an agreement with New York Gov. Kathy Hochul on the state’s fiscal year 2026 budget. Hochul delayed the budget nearly a month to include tax cuts, criminal law reform measures, the addition of what she called an “inflation refund,” and a phone-free schools provision.

The governor’s office announced on April 28 that an agreement had been reached on the $254 billion budget, which had been held up in negotiations weeks past its April 1 deadline.

“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,” Hochul said at a news conference on April 30.

The budget now needs to pass the state Legislature before it reaches Hochul’s desk for approval.

$1 Billion in Tax Cuts

A tax cut of $1 billion for middle-class and low-income residents will affect more than 75 percent of New Yorkers, according to Hochul. Joint filers earning up to $323,000 a year will be eligible for the tax break.

Hochul said the cuts will make taxes for the middle class the lowest they have been in the state in 70 years and provide hundreds of dollars on average to most households.

Current state income tax ranges from 4 to 10.9 percent, one of the highest marginal tax rates in the country.

Increased Child Tax Credit

The budget included a large expansion of the New York child tax credit. Families will now get up to $1,000 in tax credit every year for each child under age 4, and $500 for each child aged 4 to 16. This will cause the average child tax credit going to families to double from $472 to $943.

The expansion of the tax credit system will cover about 2.75 million children in New York.

Some restrictions were lifted on eligibility for the tax credit. More than 187,000 children are newly eligible for the program.

Inflation Refund

Hochul has credited rising prices and inflation with an increase in state-collected sales tax. New York will be giving money back to residents in the form of the first-ever “inflation refund checks.”

The total will be $2 billion given to 8 million New Yorkers, with checks to be sent starting later this year.

The inflation refund will mean that joint tax filers making under $150,000 a year will receive $400, according to the governor’s office. Joint filers making between $150,000 and $300,000 a year will receive a $300 check. Single filers with less than $75,000 in income will receive $200, while single filers making between $75,000 and $150,000 will receive $150.

Phone-Free Schools

The budget will invest $13.5 million into helping schools ban smartphones and other smart devices during the school day.

The funding would go toward the development and implementation of policies surrounding phone use and to facilitate storage for student devices during the school day.

The “bell-to-bell distraction-free schools” policy will not ban the use of devices that do not have internet access, however.

Changes to Discovery Laws

The budget also includes changes to New York’s discovery laws to allow prosecutors more time and leeway in evidence gathering. According to the governor, reforms to the state’s discovery laws in 2019 created a loophole for criminals to have charges thrown out on technicalities.

New York City Police Commissioner Jessica Tisch has also credited the 2019 reforms with increased recidivism—the repeated commission of crimes after individuals have been arrested and released for the same or similar crimes. The changes are aimed at addressing the issue of recidivism in the justice system.

The budget allocates $120 million to discovery law compliance for prosecutors and defense attorneys.