A 8965 New York Assembly · 2025 Regular Session

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

This bill would allow taxpayers to exclude overtime pay from their federal adjusted gross income for tax purposes. Specifically, it defines "overtime compensation" as wages earned beyond an individual's normal scheduled work hours and subtracts this amount from taxable income. The provision applies to taxable years beginning on or after January 1, 2026. It directly affects individual taxpayers who earn overtime wages, reducing their taxable income by the amount of qualifying overtime compensation.

Bill status failed 1 of 4 stages cleared

Introduction

Aug 2025

Committee Review

Floor Vote

Governor

Introduced Aug 13, 2025 Last action Jun 4, 2026

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What changed between versions

A8965 → A8965A · 2 edits

MINOR

The bill was amended to clarify the definition of 'overtime compensation' eligible for a state tax deduction. It now explicitly includes overtime paid under collective bargaining agreements where the standard workweek is at least 40 hours, ensuring workers in unionized roles with specific scheduling agreements qualify for the tax benefit.

Scope change

The bill's scope was expanded to include specific types of overtime compensation previously potentially excluded due to ambiguity, particularly for employees covered by collective bargaining agreements with standard workweeks of 40 hours or more.

ELIGIBILITY

Added a new provision allowing overtime compensation paid under pre-existing collective bargaining agreements to be included in the tax deduction, provided the agreement specifies a standard workweek of at least 40 hours.

DEFINITION

Clarified that 'overtime compensation' includes wages paid in excess of the regular rate for work performed under specific labor agreements involving standard hours of 40 per week.

Floor votes

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Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Mar 25, 2026

Lower · Passed

PRINT NUMBER 8965A

lower

Mar 25, 2026

Lower · Passed

AMEND AND RECOMMIT TO WAYS AND MEANS

lower

Jan 7, 2026

Committee

REFERRED TO WAYS AND MEANS

lower

Aug 13, 2025

Committee

REFERRED TO WAYS AND MEANS

lower

1 primary · 11 co-sponsors