01/03/2026
Governor Kathy Hochul is making waves with her new proposal to eliminate the New York state income tax on tipped earnings.
This move comes after significant backlash from service industry workers, including bartenders and restaurant staff, who have been vocal about the burden of state tax on tips. The proposal, which will be included in the upcoming state budget, follows the federal approach and would exempt up to $25,000 in tipped income from state tax.
Critics had argued that the tax was cutting into workers' take-home pay, especially after similar relief was implemented federally.
While some Republican leaders have praised the decision, they also called for swift action to pass it into law.
Hochul’s move is a major shift after resistance in Albany.
Amid the tip tax talk, the Governor also granted clemency to 13 individuals, making it a busy start to 2026. ✨