New York Senate Bill S03033

New York 2025-2026 Regular Session

• Introduced: 1/23/25
• Refer: 1/23/25
• Refer: 1/7/26

Caption

Provides a tax deduction for small business employers of 25% of the wages, salary or compensation paid to up to ten employees who earn up to 110% of the minimum wage.

Summary

S03033 would amend New York’s personal income tax law to create a new deduction for qualifying small businesses. A taxpayer that meets the bill’s definition of a small business could deduct an amount equal to 25% of the wages, salary, or other compensation paid to up to ten employees, so long as those employees earn no more than 110% of the applicable minimum wage. The deduction would apply beginning with taxable years starting on or after January 1, 2026, and would take effect immediately upon enactment. The bill is aimed at reducing the tax burden on small employers that pay lower-wage workers, potentially offsetting some payroll costs and encouraging retention or hiring. Because the deduction is tied to wages paid to a limited number of employees and capped by wage level, it is targeted rather than broad-based, and it would primarily benefit smaller firms with lower-paid workforces.

Impact

The bill would amend section 612 of the Tax Law by adding a new personal income tax deduction for eligible small business taxpayers. It would not directly change wage laws or minimum wage rates, but it would create a new tax preference for businesses defined as small businesses under the Economic Development Law. The practical effect would be to reduce taxable income for qualifying taxpayers, thereby lowering state income tax liability for some small employers and indirectly affecting employees in lower-wage positions through employer cost relief.

Sentiment

Based on the bill text and available context, the measure appears generally supportive of small business interests and workforce affordability. There is no recorded committee debate or vote history in the provided materials, so no formal opposition or endorsement is documented here. The bill’s framing suggests a pro-business, pro-employment policy rationale focused on helping small employers manage labor costs.

Contention

The main policy question likely concerns whether the deduction is an effective and equitable use of the tax code. Supporters would likely emphasize relief for small businesses and incentives to maintain jobs, while critics could question the revenue cost to the state, whether the benefit is too narrow, and whether it favors employers over broader tax relief or direct wage support for workers. Another possible point of contention is the eligibility design, including the definition of small business, the cap of ten employees, and the wage threshold tied to 110% of minimum wage.