New York made several changes and updates that may affect taxpayers filing a 2026 New York return. Below are the key items to be aware of before filing.
Metropolitan Commuter Transportation Mobility Tax (MCTMT) Changes for Self-Employed Taxpayers
New York continues to use a two-zone system for calculating the Metropolitan Commuter Transportation Mobility Tax (MCTMT) for self-employed individuals.
Zone 1 Counties
- Bronx
- Kings (Brooklyn)
- New York (Manhattan)
- Queens
- Richmond (Staten Island)
Zone 2 Counties
- Dutchess
- Nassau
- Orange
- Putnam
- Rockland
- Suffolk
- Westchester
For tax year 2026, self-employed individuals are subject to the MCTMT only if their net earnings allocated to a zone exceed $150,000.
The tax rates are:
- 0.60% (.0060) of net earnings allocated to Zone 1
- 0.34% (.0034) of net earnings allocated to Zone 2
Important Note
The $150,000 threshold is calculated separately for each zone and on an individual basis, even if a joint return is filed.
For example, a taxpayer with $175,000 allocated to Zone 1 and $140,000 allocated to Zone 2 would only owe MCTMT on the Zone 1 income.
Military Residency Elections Continue
Military servicemembers and their spouses may continue to elect one of the following locations as their state residence for income tax purposes:
- The servicemember's legal residence or domicile
- The spouse's legal residence or domicile
- The state where the servicemember's permanent duty station is located
These elections can affect filing requirements, residency status, and the taxation of income.
Part-Year Resident and Local Tax Calculations
Taxpayers who moved into or out of New York during 2026 must file as part-year residents and allocate income between resident and nonresident periods.
In addition, taxpayers who were residents of New York City or Yonkers for only part of the year may need to complete additional schedules to calculate any city or local tax surcharges.
Expanded Empire State Child Credit
The enhanced Empire State Child Credit remains available for qualifying families.
Eligible taxpayers may receive:
- Up to $1,000 for each qualifying child under age 4.
- Enhanced credit amounts for qualifying children ages 4 through 16, subject to income limitations and eligibility requirements.
The actual credit amount depends on filing status, income, and the number of qualifying children.
Inflation Refund Check Reporting
Taxpayers who received a New York Inflation Refund Check may need to review whether any portion is federally taxable.
Generally:
- Taxpayers who claimed the standard deduction for the applicable year will not have taxable income from the payment.
- Taxpayers who itemized deductions and received a federal tax benefit from deducting state taxes may have a federally taxable amount under the tax benefit rule.
The payment is not taxable for New York income tax purposes.
What Should New York Taxpayers Review Before Filing?
Before filing a 2026 New York return, consider the following:
- Determine whether you qualify for the Empire State Child Credit.
- Review the federal tax treatment of any Inflation Refund Check received.
- Verify your residency status if you moved during the year.
- Review any military residency elections that may apply.
- Determine whether self-employment income exceeds the MCTMT thresholds and requires allocation to Zone 1 or Zone 2.
These items can affect your New York tax liability, refund amount, and eligibility for credits on your 2026 return.