New York's child care tax credit grows by $576 on average

If you pay for care so you can work or attend school full time, New York gives back part of the cost at tax time. Starting with tax year 2026, the old credit, which was figured as a share of the federal credit, is replaced by New York’s own credit. Only full-year residents qualify. The credit is refundable, so you can receive the full amount even if you owe little or no state income tax.

The new credit equals 55% of eligible care expenses for families with New York adjusted gross income of $15,000 or less. The percentage declines as income rises, to a floor of 4%; an additional reduction applies above $750,000. Expenses are capped at $3,000 for one qualifying person, $6,000 for two, and up to $9,000 for five or more. Care for a qualifying child under 13 counts, as does care for a spouse or dependent who cannot care for themselves. You claim the credit on the 2026 state return filed in 2027.

Gov. Kathy Hochul proposed the change in her January 2026 budget. Her office projected that about 230,000 filers would get a bigger credit, averaging $576 more. The Legislature passed the revenue bill on May 27, and Hochul signed it the next day. The Assembly estimated that the credit would reduce revenue by $65 million a year beginning in fiscal 2028. The same bill’s revenue changes were projected to raise $1.906 billion net that year, largely through corporate tax provisions.