Governor Kathy Hochul’s FY 2026 state budget delivers major financial relief for working families across New York, including the largest-ever expansion of the state child tax credit, historic middle-class tax cuts, inflation refund checks, and universal free school meals.
Expanded child tax credit to reach 1.6 million families
A centerpiece of the plan is an overhaul of New York’s child tax credit. Families will now receive up to $1,000 per year for children under four and $500 for children ages four through sixteen. The average credit will nearly double—from $472 to $943—benefiting about 2.75 million children.
More than 187,000 children will become newly eligible due to the removal of minimum income thresholds. For instance, a family of four with a toddler and school-age child earning up to $110,000 will now receive $1,500 annually. Even families earning up to $170,000 will qualify for partial benefits.
These changes are expected to reduce child poverty by 8.2% statewide. When combined with other efforts like expanded child care subsidies, overall child poverty reduction could reach 17.7%.
Middle-class tax cuts hit 70-year low
The budget also delivers tax cuts to over 75% of New York filers, offering nearly $1 billion in annual relief. The phased-in rate changes will lower tax rates for joint filers earning up to $323,000, bringing middle-class taxes to their lowest level in seven decades.
Inflation refund checks going out to over 8 million households
Acknowledging the financial strain caused by inflation, the state will issue direct refund checks later this year. Eligible households will receive between $150 and $400, depending on income and filing status:
- Joint filers earning up to $150,000: $400
- Joint filers earning $150,001–$300,000: $300
- Single filers earning up to $75,000: $200
- Single filers earning $75,001–$150,000: $150
These payments will return $2 billion to residents.
Free school meals save families $1,600 per child
The budget guarantees free breakfast and lunch for all 2.7 million public school students across New York, regardless of income. The program eliminates paperwork, reduces food insecurity, and is expected to save families around $165 per month, or nearly $1,600 per child annually.
Studies show universal school meals improve academic performance, attendance, and behavior.
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