What’s in the 2025-26 State Budget For RPEA Members

The legislature passed a record $254 billion state budget last week, 37 days late, which makes it the latest budget since 2010. As usual, it contains something for nearly everyone. Here is what affects RPEA members:

IRMAA

Retirees with an income over a certain level must pay an additional Medicare premium known as the Income-Related Medicare Adjustment Amount, which is reimbursed by the state. The Executive Budget again proposed eliminating this reimbursement. Thanks to RPEA’s advocacy, the legislature restored it.  

Inflation Refund Checks

Retirees will receive checks aimed at countering the effects of inflation. Joint tax filers with an income up to $150,000 will receive $400 while those with an income of between $150,000 and $300,000 will receive $300. Single tax filers with an income up to $75,000 will receive $200 while single filers with an income between $75,000 and $150,000 will receive $150. There are no age restrictions and no forms to fill out. If you filed a tax return, are below the income thresholds (NYS adjusted gross income) and no one else claimed you as a dependent, you will receive a refund. The state will issue more details shortly.

STAR Program Changes

Beginning in 2026, the state—not local assessors—will determine eligibility for Basic and Enhanced STAR exemptions using tax and registration data. The income threshold will continue to exclude certain IRA distributions, and the definition of eligible income has been clarified as the combined adjusted gross income of all owners and spouses residing on the property.

Enhanced STAR will now require only one owner to be age 65 or older, and a surviving spouse can retain eligibility at age 62. Appeals will be handled directly by the Department of Taxation and Finance, not local boards. Homeowners who have qualified for three consecutive years without filing tax returns will no longer need to submit annual verification unless asked.

Tax Cut

Retiree taxpayers below certain income levels will receive a 0.2 percent tax cut in 2026 and 2027. It will apply to joint tax filers with an income less than $323,200 and single filers with an income less than $215,400. The real effect will be a $600 saving for taxpayers at $300,000 a year and $100 for taxpayers at $50,000 a year.

Budget Adjustments

The legislature granted Governor Hochul’s request for authority to make reductions in the state budget during the fiscal year to compensate for a downturn in the economy or federal cuts to state funding for programs.

Political Harmony

Following the well publicized fallout between Governor Hochul and Lieutenant Governor Antonio Delgado, candidates for governor and lieutenant governor will have to run on a joint ticket instead of being elected independently. Currently, the state holds separate primaries for each office, which hasn’t worked out so well in the past. Mary Anne Krupsack was elected along with Hugh Carey in 1974; she wasn’t his choice. Al DelBello was New York City Mayor Ed Koch’s running mate during the 1982 gubernatorial campaign while candidate Mario Cuomo chose Carl McCall. Koch lost and DelBello won but resigned two years later claiming Governor Cuomo didn’t give him enough to do.