With the cuts to Medicaid, food aid and other safety net programs in the Republicans’ massive tax and spending law widely unpopular, New York Republican hopes in the 2026 state elections may depend on convincing New Yorkers that they are big beneficiaries of the tax cuts in the One, Big, Beautiful Bill.

It might be tough going.

The first analysis of how the tax cuts will affect New Yorkers from state comptroller Tom DiNapoli, released Monday, finds that provisions allowing deductions of some overtime pay and some car loan interest, and changes to the child tax credit, will have relatively little impact in the state.

Workers whose income is heavily dependent on tips are likely to see substantial savings on their federal income tax, but they comprise only a small portion of the state’s workforce..

Republicans may have the most success with seniors — 90% of whom will benefit from a new tax deduction just for people age 65 and older.

But on the most politically crucial change, an increase in the deduction for state and local taxes, the comptroller was unable to determine how many state residents will be able to use the higher limit to reduce their federal income taxes.

All seven New York Republicans in the House voted in favor of the bill, five of whom represent swing districts and are regarded as vulnerable in 2026. Meanwhile, Rep. Elisie Stefanik’s energetic run for governor has given Republicans hopes of taking the governorship for the first time since 2006. After passage of the bill she hailed it as the “biggest tax cut ever for New Yorkers.”

Most of the tax cuts are a result of making permanent changes made in the first administration of President Donald Trump, with most of the benefits going to the wealthiest Americans.

Seniors are the one clear group of new winners. Almost 60% of New Yorkers will take advantage of the new $6,000 deduction that seniors making less than $75,000 can add to the standard deduction. While it phases out for those making more than $75,000, another 30% will receive some benefit.

DiNapoli studied statewide impacts. The limits are doubled for couples filing jointly except for the increased limit on state and local tax deductions, also known as SALT.

Workers who receive tips income in jobs that traditionally receive cash tips make up only 6% of the jobs in the state. That group — primarily wait staff, bartenders, personal care workers, delivery drivers and hotel staff — will be able to deduct $25,000 as long as they make less than $150,000. Median incomes for those jobs range from $33,000 to $62,000, DiNapoli’s report found. Given the standard deduction of $15,750, many of them will owe no federal income taxes.

The report notes the dual standard the law creates. A much larger number of home health care workers and child care workers make about the same amount of money, but will continue to pay income taxes.

A provision that allows taxpayers to exclude up to $12,500 in overtime pay is so complicated and requires so much added paperwork that many employers may wind up limiting overtime as a result, the report speculates. In any event, only 20% of New York workers appear to be eligible.

Since New Yorkers have the third lowest car loan debt in the nation, an interest deduction for loans of cars made in the United States between 2026 and the end of 2028 is likely to have little impact. 

The changes to the child tax credit will provide slightly higher benefits to working New Yorkers who pay enough taxes to make the credit usable. But it also contains a provision requiring families to provide Social Security numbers for parents instead of just for the child. A little over 2 million New Yorkers received $6 billion in credits in 2022, the last year for which data is available.

But the report was unable to answer the crucial question of whether the higher SALT cap, the key accomplishment of New York’s Republican congressional delegation, will help enough New Yorkers to be a political advantage.

The bill increases the amount that taxpayers who itemize can deduct to $40,000, up from $10,000.

But the DiNapoli report notes that about 90% of state tax filers take the standard deduction. The deduction phases out for those making more than $500,000 and is not available to anyone making more than $600,000. 

So a married couple must have total deductions exceeding the $31,500 standard deduction but make less than $600,000. In addition, a total cap on deductions for those in the highest tax bracket could further limit the number of people who could take advantage of the higher limit. It isn’t clear if anyone will be able to figure out how many taxpayers are in that group.

The tax cuts are effective in 2025 so most New Yorkers will know if they saved money or not before they vote in the midyear elections.

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