New York · Federal Conformity & the OBBBA
New York follows federal tax law automatically — except where it just said no to the OBBBA.
New York is a ROLLING conformity state: your New York return starts from federal AGI as federal law exists for that year. When Congress changes the IRC — as the OBBBA did in 2025 — the change flows into New York automatically unless Albany decouples. In 2026, it did, twice.
Does a new federal tax law automatically change my New York taxes?
Generally yes, at the AGI line. Tax Law §612(a) defines New York AGI as your FEDERAL AGI with specified modifications, and §607(a) adopts federal terms 'as the same may be or become effective at any time' — rolling conformity. Federal changes that move AGI flow into New York automatically; federal BELOW-the-line items (standard/itemized deductions, QBI) never enter New York's computation unless New York legislates a parallel rule.
Which OBBBA changes did New York decouple from?
Commonly misreportedTwo, per Chapter 59 of the Laws of 2026 (announced in DTF Notice N-26-1, effective TY2025+): (1) IRC §168(n) qualified production property accelerated depreciation — New York does not conform; you add back the federal deduction and take a recomputed depreciation subtraction; and (2) the OBBBA's restoration of immediate §174/174A R&E expensing — New York keeps capitalization, with new §612(c)(49) (post-2024 R&E over 60 months) and §612(c)(50) (pre-2025 remaining amounts). N-26-1 also granted TY2025 penalty and interest relief for returns filed before the guidance.
Did New York adopt the federal tips deduction?
Effectively yes, by parallel legislation: because the federal tips deduction (new IRC §224) is below-the-line and would never reach New York AGI, New York enacted its own subtraction — §612(c)(48), up to $25,000 of qualified tips, for tax years beginning in 2026. (Note: §612(c) currently contains three different paragraphs numbered (48) — tips is one of them.)
What is the CARES-era 'freeze' I see on old returns (Form IT-558)?
For tax years beginning BEFORE 2022, §607(a) froze conformity at the IRC as of March 1, 2020 — so CARES Act changes (§163(j) limits, §172 NOL carrybacks, §461(l)) did not apply to New York, with differences reported on Form IT-558. The freeze self-terminated for TY2022+, but it still governs amended returns and audits of 2020–2021 years.
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Related New York tax questions: The Tips Subtraction · Pass-Through Entity Tax (PTET) · Itemized Deduction Limits
Tax intelligence, not tax advice. Every answer above cites primary law you can check; a qualified professional should review your specific situation before filing. TaxPulse — a PulseNetwork intelligence engine.