Families in New York will see major tax relief thanks to a new expansion of the state’s Child Tax Credit. Included in the FY 2026 budget, the credit will now provide up to $1,000 per child under age 4 and $500 per child aged 4 to 16 — nearly tripling the previous maximum.
Governor Kathy Hochul called the move a cornerstone of her affordability agenda and a crucial tool in the fight against child poverty.
How the expanded credit works
Starting with the 2025 tax year, eligible families will receive:
- $1,000 per child under 4
- $500 per child aged 4 to 16
The Empire State Child Tax Credit is fully refundable. Families can claim the full amount even if they owe less in taxes. The budget also expands eligibility to include more middle-income households.
Who benefits?
An estimated 1.6 million families and 2.75 million children across the state will qualify. The expansion targets working- and middle-class families who face rising costs for housing, food, and child care.
Hochul framed the policy as a long-term investment. “We’re giving families real help when they need it most, and laying the foundation for a healthier, more equitable future,” she said.
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Why this matters
New York has one of the highest child poverty rates in the U.S. In cities like Rochester, Syracuse, and Buffalo, nearly half of children live in poverty.
The new credit supports the state’s goal of cutting child poverty by 50% within a decade — a benchmark set by the Child Poverty Reduction Act, which Hochul signed in 2021.
Combined savings for families
The Child Tax Credit expansion is part of a larger affordability package in the FY 2026 budget. Other measures include:
- $1 billion in middle-class tax cuts
- $2 billion in inflation refund checks
- $340 million for free school meals statewide
Together, these changes could save the average family up to $5,000 in 2026.
What’s next?
The expanded credit is authorized through tax year 2027. But many lawmakers and advocacy groups want to make it permanent.
“Reducing child poverty takes sustained investment,” said one policy analyst. “This credit is a smart and proven way to help working families and lift kids out of hardship.”
The state will provide more information in early 2026 on how to claim the credit during tax season.
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