New York Governor Kathy Hochul held a press conference on the 24th to announce a series of measures aimed at reducing family childcare expenses and improving maternal care, including increasing the Child Tax Credit and introducing a new $1800 subsidy for newborns. These measures will gradually take effect in the coming months, providing substantial financial support for low to middle-income families throughout the state.
Starting from January 2026, the state government will expand the Child Tax Credit exemption amount. The maximum exemption amount for children under four years old will be increased to $1000, benefiting approximately 1.6 million households statewide. Starting in 2026, the exemption amount for children aged 4 to 16 will remain at a maximum of $330, and will further increase to $500 in 2027.
The state government estimates that the average amount of exemption that families can receive will nearly double once the policy is implemented, increasing from $472 to $943.
For example, a family of four with one toddler and one school-aged child, with an annual income of less than $110,000, is expected to receive a $1500 annual exemption, nearly $1000 more than under the current system. Higher-income families will also benefit for the first time, with a family of four earning $170,000 receiving over $500 in exemptions.
This reform simultaneously eliminates the minimum income threshold, ensuring that low-income families are no longer excluded from the maximum exemption amount, and adopts a full “refundable” approach so that even the most vulnerable families can receive the full exemption.
Eligible taxpayers will be able to claim the relevant exemptions starting from the 2026 tax season.
As part of a broader affordability policy framework, the Hochul administration has introduced the new “Birth Allowance for Beginning Year” (BABY) subsidy for newborns. This measure targets low-income families receiving public assistance, providing a one-time $1800 fund at the birth of a newborn to cover initial childcare expenses.
The Child Tax Credit exemptions and newborn subsidy policies by the New York State government will amount to approximately $2.2 billion.