The initiative offers free in-person and virtual tax preparation services for residents who live or work in the city and earn up to $97,000 as a family or $68,000 as an individual or couple without dependents, officials said. Services are available now at more than 140 Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites across the five boroughs, including at NYC Health + Hospitals and MetroPlusHealth locations.

“New Yorkers shouldn’t have to jump through hoops or pay outrageous fees just to file their taxes,” Mamdani said at the event. “Through NYC Free Tax Prep, our administration is working across agencies to deliver exactly that — helping New Yorkers file for free, receive the tax refunds they’re owed, and avoid hidden fees and tax scams.”

The city is pairing the free filing program with enhanced enforcement against deceptive paid tax preparers, including compliance sweeps and notices warning of the city’s ban on illegal overcharging and hidden fees, officials said.

DCWP Commissioner Sam Levine said the effort is aimed at ensuring preparers adhere to city consumer protections and that filers receive all credits and refunds for which they qualify. “This tax season, DCWP is ramping up efforts to protect New Yorkers from sketchy tax scams,” Levine said.

NYC Health + Hospitals Vice President and Chief Population Health Officer Nichola Davis, MD, MS, said the partnership has expanded to 15 locations since 2018 and helps reduce financial stress that can affect health. “By helping our patients secure free filing and tax credits, we are reducing some of the financial stress that often stands in the way of good health,” Davis said.

Council Member Harvey Epstein, chair of the City Council Consumer and Worker Protection Committee, said free tax assistance can have a “meaningful impact” on working families.

Volunteer preparers also assist filers with questions about student loan debt and other financial matters. Residents can find service locations and make appointments through nyc.gov/TaxPrep or by calling 311, city officials said.

The Internal Revenue Service began accepting returns on Jan. 26 and will continue through April 15, though many NYC Free Tax Prep sites remain open beyond that period to help late filers and those with complex filing needs.

City financial projections anticipate a looming $10 billion to $12 billion deficit in the coming fiscal year which is among the most significant shortfalls since the Great Recession that is driven by structural cost pressures and projected declines in discretionary revenues. Mamdani has rejected cuts to core services and instead proposed expanding the city’s revenue tools.

At a public briefing, Mamdani reiterated his call to levy an additional 2 percent personal income tax on New Yorkers earning above $1 million annually and to raise the state corporate tax rate to 11.5 percent. The mayor’s office estimates that these adjustments could generate roughly $9 billion in annual revenue, a figure tied directly to funding priorities that include fare-free buses and universal child care for children aged six months to five years.

“It is time for our wealthiest residents and most profitable corporations to pay their fair share so we can invest in everyday New Yorkers,” Mamdani said, framing his strategy as both a fiscal necessity and an equity imperative. He also underscored longstanding concerns about the city’s position in the state revenue system, saying that New York City contributes a disproportionately large share of state tax receipts relative to what it receives back in services.

State Opposition and Fiscal Politics

Governor Kathy Hochul’s $260 billion state budget, released earlier this month, does not include new personal income tax levies on top earners and maintains a firm stance against raising income tax rates. While the governor has expressed openness to adjustments in corporate tax policy, she has resisted broad tax increases as a means to plug budget gaps. The divergence between City Hall and Albany underscores competing fiscal philosophies within New York’s Democratic leadership and points to a potentially fractious budget negotiation.

Mamdani’s proposal now faces a legislative gauntlet. Under current law, the city cannot unilaterally impose the new income or corporate tax rates without state approval — a dynamic that places considerable leverage in the hands of legislators and the governor’s office. Albany leaders will confront these issues amid a broader election-year political calculus, as both chambers of the legislature and Gov. Hochul navigate competing pressures from progressive advocates and moderate constituencies.

Policy Stakes and Economic Debate

Fiscal analysts note that New York City’s revenue base has traditionally depended on a small cohort of wealthy taxpayers, raising concerns that steep tax increases could erode the tax base if individuals and firms relocate to lower-tax jurisdictions. Critics argue that the combined city and state top marginal tax rate could approach historic highs, potentially diminishing the city’s competitive tax position.

Supporters counter that targeted tax increases can expand the city’s fiscal capacity without broadening the burden on middle and lower-income residents. They also argue that enhanced revenue would support public investments that address cost-of-living pressures and promote long-term economic stability. The Independent Budget Office and other forecasting bodies have underscored the sensitivity of revenue projections to broader economic trends, particularly volatility in high-income earnings and corporate profits.

Budgetary Impasse and Next Steps

With the state legislative session underway and a final state budget due by April 1, the coming weeks will crystallize whether Mamdani’s revenue strategy gains traction in Albany. City officials have signaled that, absent state approval for new taxes, they will evaluate alternative budget scenarios but detailed contingency planning has not yet been disclosed.

The unfolding fiscal debate highlights the structural challenges confronting New York City’s government: mounting service demands, limited local taxation authority, and the balancing act between progressive policy aspirations and financial sustainability. How Albany responds to Mamdani’s proposals will shape the fiscal trajectory of the nation’s largest city well beyond the current budget cycle.

The expansion of the Empire State Child Credit, which was secured in the most recent state budget, will significantly increase the amount of money flowing to low- and middle-income families. For the first time, households with children under the age of 4 are eligible for a credit of up to $1,000 per child, while the credit for older children remains at $330 for the current filing year before rising again in 2027.

“The Empire State Child Credit delivers a vital financial boost to New York families,” Ms. Hochul said in a statement. “Now, after the largest expansion of the credit in New York history, more New Yorkers have access to the credit than ever, which will put money directly in families’ pockets and help make our state more affordable for millions of recipients.”

The announcement comes at a pivotal moment for Ms. Hochul, who has made “affordability” the central pillar of her legislative agenda as she navigates a political landscape where the high cost of housing and daily essentials has become a primary concern for voters.

State officials estimate that the changes will nearly double the average benefit for families, from $472 to $943. Perhaps more significantly, the state has eliminated a long-standing “phase-in” provision that previously prevented the poorest families including those with little or no earned income, from claiming the full value of the credit. By removing this floor, the administration hopes to reach those most at risk as projections suggest the expansion could reduce child poverty in New York by more than 8 percent.

The revised rules also cast a wider net for the middle class. While the full credit remains available to married couples filing jointly with incomes up to $110,000, a new, more gradual phase-out allows families with higher earnings to receive partial benefits. Under the new structure, a family of four with one toddler and one school-age child earning as much as $170,000, could now receive more than $500.

“From groceries to strollers to kids’ clothes, the cost of living and raising a family is still too damn high,” Ms. Hochul added, echoing a phrase she has frequently used to describe the state’s economic challenges.

The move was met with cautious optimism by anti-poverty advocates, who have long argued that direct cash transfers are the most efficient way to support struggling households.

“Lifting the minimum income requirement is a game changer for the families who need this support the most,” said one advocate for children’s rights in the state. “But the challenge now is ensuring that every eligible family actually files their taxes to claim it.”

State officials emphasized that the credit is refundable, meaning that if the credit exceeds a taxpayer’s liability, they receive the difference as a refund check. However, the Governor noted that to receive the money, New Yorkers must file a state tax return which is a hurdle for some low-income residents who may not otherwise be required to file.

The expansion of the child tax credit is part of a broader $9 billion affordability package touted by the Hochul administration, which includes minimum wage increases and middle-class tax cuts. Critics, however, have questioned whether these targeted credits can keep pace with the state’s reputation for high taxes and the high cost of childcare, which remains a significant burden for many professional and working-class parents.

As the 2026 tax season begins, the administration is planning a statewide push to raise awareness of the credit, including through partnerships with community organizations and free tax-preparation sites.

“This isn’t just a tax policy,” Ms. Hochul said. “It’s a lifeline.”

Branded “Money in Your Pockets”, the governor’s new initiatives span child care, insurance, rent and utility costs, and food assistance, all intended to ease cost of living burdens that have weighed heavily on households across the state. Her proposals build on earlier affordability efforts embedded in the FY 2026 budget and seek to expand existing programs while introducing new tools to protect working families.

“We know New Yorkers are working harder than ever to make ends meet,” Hochul said. “These initiatives are designed to lower the costs that hit working families the hardest – from child care and energy to housing and insurance – and ensure that government is working for working people.”

Child Care and Early Education Relief

A cornerstone of the plan is a major expansion of child care support. Hochul proposed investments that would move New York toward universal, affordable child care, beginning with a $1.7 billion increase in funding for child care and pre-K services statewide. The expanded focus includes new pilots for countywide child care programs and subsidies for tens of thousands more families. An Office of Child Care and Early Education would be created to manage implementation, and continued outreach on the child tax credit aims to help eligible families fully benefit from a recent expansion that raises the annual credit to up to $1,000 per child under four.

Lower Insurance and Utility Costs

Hochul’s plan also targets high insurance and energy costs, which have eaten into family budgets. Recognizing that insurance fraud, particularly staged auto accidents, has driven up premiums, the governor would strengthen enforcement against fraud and cracking down on bad actors in partnership with multiple state agencies. Meanwhile, new proposals call for modernizing utility regulation to curb rate increases, expand discounts for energy efficiency upgrades, and enhance protections against unfair utility shutoffs.

Homeowners and renters would see protections too. Hochul proposed checks on excessive insurer profits, automatic ratepayer safeguards, and new penalties for landlords who engage in harassment of rent-regulated tenants. The plan would raise income limits for rent freeze programs which includes benefits for seniors and people with disabilities while helping more households avoid runaway rent increases or eviction.

Food Security and Monthly Relief

To combat food insecurity, the governor pledged increased investment in food assistance operations, including expanding capacity for food banks and pantries statewide. She also reaffirmed past efforts such as universal free school meals, which have already saved families thousands per child each year. Hochul’s broader affordability strategy builds on a record of inflation refund checks to millions of households and expanded unemployment benefits, all designed to put money back into local economies.

A Broader Affordability Push

The governor’s latest affordability push also includes a proposal to eliminate state income taxes on up to $25,000 in tipped income beginning in the 2026 tax year, a move aimed at easing financial pressure on service workers across New York. If approved by the Legislature, the change would allow restaurant servers, bartenders, delivery workers, and other tipped employees to keep more of their earnings at a time when rising rents and everyday expenses continue to outpace wage growth.

The administration has framed the proposal as both an economic relief measure and a recognition of the essential role tipped workers play in the state’s economy, particularly in cities like New York where service jobs underpin tourism, nightlife, and local business activity.

Hochul’s proposals come amid a broader campaign to make New York more livable and less costly, particularly as inflationary pressures intersect with housing shortages. State lawmakers and advocates have applauded the focus on targeted relief, while critics urge careful budgeting to balance costs with longer term sustainability.

As the legislative session moves forward, Hochul’s affordability agenda is expected to shape budget negotiations and policy debates, reflecting economic concerns shared by families from Buffalo to New York City.