New York Assembly Bill A08965

New York 2025-2026 Regular Session

• Introduced: 8/13/25
• Refer: 8/13/25

Caption

Subtracts from federal adjusted gross income any overtime compensation earned by an individual; defines overtime compensation.

Impact

If implemented, A08965 would affect how state tax liabilities are calculated for individuals who earn overtime. By allowing for the exclusion of overtime from taxable income, the bill could provide significant financial relief to employees who routinely work beyond their standard hours. This adjustment could lead to increased disposable income for those workers, ultimately benefiting the economy through enhanced consumer spending.

Summary

Bill A08965 proposes an amendment to New York's tax law that aims to subtract overtime compensation from an individual's federal adjusted gross income. This legislative initiative seeks to alleviate the tax burden on workers who earn overtime by ensuring that such earnings are not counted against their gross income for the purposes of state taxation. By defining overtime compensation as wages earned for hours worked beyond an individual's normal scheduled work hours, the bill clarifies what types of earnings would qualify for this tax deduction.

Contention

While the bill may seem beneficial for employees, notable points of contention could arise during discussions in the legislature. Some critics may argue that the fiscal implications of reducing taxable income through such deductions could result in a decrease in state revenue. Additionally, there may be concerns about how these changes could disproportionately affect different sectors of the workforce, potentially benefiting higher earners more than those in lower-wage positions who are less likely to receive overtime pay.