Lower New York income tax rates for joint filers earning up to $323,200

If your taxable income falls within New York’s five lowest brackets, your rate went down this year. The 2025 budget cut those rates by 0.1 percentage point for 2026, and another 0.1-point cut is due in 2027. The savings reach joint filers with taxable income up to $323,200. The state’s enacted financial plan says about 8.3 million filers, 77% of all filers, will share roughly $1 billion in annual relief once the cut is fully phased in.

You don’t have to apply. The new rates are built into paycheck withholding, so most workers started seeing slightly less state tax taken out of their first paycheck of 2026. When you file, the lower rates are used to calculate your final state tax bill.

Gov. Kathy Hochul proposed the cut in her January 2025 budget, and she reached the final deal with Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie. The Legislature passed the revenue bill on May 8, 2025, with the Assembly voting 103–46 and the Senate 35–27. Hochul signed it the next day.

The enacted budget did not pair the tax cut with overall service cuts: state operating spending rose 9.3%, with nearly half of the increase going to Medicaid and school aid. The same law extended higher tax rates on top earners for five years, through 2032. The state’s financial plan projected that extension would offset the lower-bracket cut once the old top rates otherwise would have expired in 2028. Income over $25 million remains subject to a 10.9% top rate.