A 5856 New York Assembly · 2025 Regular Session

Establishes a tax deduction for cash and credit card tips received

This bill allows workers to deduct cash tips they receive from their New York state income tax. It specifically applies to cash tips classified as wages under federal tax law (like those from servers or bartenders who collect cash). The deduction covers tips received during the taxable year, reducing the worker's taxable income. The change would take effect for tax years beginning on or after January 1, 2025.

Bill status in committee 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 24, 2025 Last action Jan 13, 2026

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What changed between versions

A5856 → A5856A · 2 edits

MINOR

This bill expands the tax deduction for service workers by allowing them to deduct both cash and credit card tips, whereas the previous version only covered cash tips. This change ensures that workers who rely on credit card transactions for their income receive the same tax benefit as those who receive cash.

Scope change

The bill's scope was expanded to include credit card tips in addition to cash tips, broadening the group of workers eligible for the tax deduction.

ELIGIBILITY

The definition of eligible tips was changed from 'cash tips' to 'cash and credit card tips'.

TIMELINE

The effective date for the new tax rule was moved from January 1, 2025, to January 1, 2026.

Floor votes

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Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Jan 13, 2026

Lower · Passed

PRINT NUMBER 5856A

lower

Jan 13, 2026

Lower · Passed

AMEND (T) AND RECOMMIT TO WAYS AND MEANS

lower

Jan 7, 2026

Committee

REFERRED TO WAYS AND MEANS

lower

Feb 24, 2025

Committee

REFERRED TO WAYS AND MEANS

lower

1 primary · 23 co-sponsors