NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8965
SPONSOR: DeStefano TITLE OF BILL:
An act to amend the tax law, in relation to subtracting from federal
adjusted gross income any overtime compensation earned by an individual
PURPOSE:
Eliminates taxes on overtime pay
SUMMARY OF PROVISIONS:
Section I. Subsection (c) of section 612 of the tax law is amended by
adding a new paragraph 48.
Section 2. Sets the effective date
JUSTIFICATION:
This bill would eliminate state income taxes on overtime pay for all
workers in New York State. The purpose of this legislation would be to
provide financial relief for working families, especially for those in
industries where overtime is common practice, and to encourage work at a
time when many businesses are having a difficult time attracting and
retaining employees. As costs continue to rise, many employees rely on
overtime pay to support their families to meet their financial needs.
Taxing overtime pay reduces the value of these additional earnings.
LEGISLATIVE HISTORY:
New bill
FISCAL IMPLICATIONS:
To be determined
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
beginning on and after January 1, 2026
STATE OF NEW YORK
________________________________________________________________________
8965
2025-2026 Regular Sessions
IN ASSEMBLY
August 13, 2025
___________
Introduced by M. of A. DeSTEFANO -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the tax law, in relation to subtracting from federal
adjusted gross income any overtime compensation earned by an individ-
ual
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subsection (c) of section 612 of the tax law is amended by
2 adding a new paragraph 48 to read as follows:
3 (48) Any overtime compensation received by an individual, to the
4 extent includible in gross income for federal income tax purposes. For
5 purposes of this paragraph, "overtime compensation" shall mean wages
6 earned for time an individual worked beyond such individual's normal
7 scheduled working hours.
8 § 2. This act shall take effect immediately and shall apply to taxable
9 years beginning on and after January 1, 2026.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07557-01-5
