The New York State FY 2026 budget deal, championed by Governor Kathy Hochul, introduces a series of tax benefits and stimulus payments designed to ease the financial burden on families and taxpayers.
From the application of the Child Tax Credit that adds an injection of money to families and stimulus checks for $400, the reduction of taxes to one of the lowest levels in almost a century, and to the implementation of a plan for families with school-age children that gives them $1,600 a year, Hochul and his government achieved the approval of this budget that benefits more than 1.6 million families.
Stimulus payments and other tax benefits approved in the new budget
The New York State Budget for Fiscal Year 2026 includes tax reforms and assistance programs aimed at families and taxpayers. These measures, promoted by Governor Kathy Hochul, seek to mitigate the impact of inflation and reduce costs in key areas such as education and child care.
The child tax credit triples, going to a maximum of $1,000 annually for each child under 4 years of age and $500 for each child between 4 and 16 years of age. This modification will benefit 1.6 million families, including 187,000 children from low-income households who previously did not qualify to receive it.
The average tax credit will increase from $472 to $943 per family per year. According to estimates, this measure could reduce child poverty by 8.2%. A household with two children and an income of $110,000 annually would receive $1,500 per year, almost $1,000 more than under the previous scheme.
Tax cuts for the middle class, rebates and direct stimuli
Inflation refund checks of up to $400 will be issued. Couples with incomes up to $150,000 will receive $400, while those with incomes up to $300,000 will get $300. Singles earning $75,000 or less will receive $200, and those earning up to $150,000 will get $150.
This measure will be financed with state tax surpluses and is expected to distribute $2 billion to 8 million households. Details on shipping dates and methods will be announced later. No other additional payments are contemplated in this plan.
Free school meals: up to $1,600 savings for each family per year
The program will cover 2.7 million students and eliminate breakfast and lunch costs. It is estimated that the savings per child will be $1,600 per year, which is equivalent to about $165 per month. In addition to savings, it is expected to improve school performance and reduce food insecurity among students.
For a family of five, the combination of tax credits, tax reductions, rebates, and free school meals would represent a financial relief of close to $5,000 annually. For example, a household with three children could receive $2,500 in credits, $400 in refunds and save $1,600 on school meals.
