New York return changes for 2025 and 2026

• Empire State child credit: $1,000 per qualifying child under four and $330 per child aged four to 16 for 2025, rising to $500 for 2026 and 2027.
• A new NYC income tax elimination credit for city residents with dependents, within FAGI limits and with investment income of $10,000 or less. Claimants cannot also take a city or state PTET credit.
• The real property tax credit now tests eligibility on federal AGI instead of household income.
• A refundable organ donation credit replaces the old living donor subtraction.

For tax years beginning on or after January 1, 2025, New York requires domestic research expenditures to be amortized over 60 months instead of expensed. It also decoupled from the federal write-off for qualified production property. Report the modifications on IT-225 (or CT-225 for corporations), with IT-398 or CT-399 for the depreciation schedule.

The PTET opt-in window runs from January 1 to March 15 each year, and only an authorized person at the entity can make the election, not the preparer. Estimates are due March 15, June 15, September 15 and December 15.

From 2026, self-employed MCTMT is 0.60% of net earnings in Zone 1 above $150,000 and 0.34% in Zone 2 above $150,000, with the threshold applied per person even on a joint return.