Bill > A08965

This bill proposes to modify New York State tax law by allowing individuals to subtract overtime compensation from their federal adjusted gross income when calculating state taxes. Specifically, the bill defines "overtime compensation" as wages earned for time worked beyond an individual's normal scheduled working hours, and permits taxpayers to exclude this amount from their state taxable income, provided the overtime wages are already included in their gross income for federal tax purposes. The tax deduction would take effect for taxable years beginning on or after January 1, 2026, meaning eligible taxpayers could first claim this deduction on their 2026 state tax returns. By creating this deduction, the bill aims to provide financial relief to workers who earn extra income through overtime by reducing their state tax liability on those additional earnings.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/A8965