New York Democratic Gov. Kathy Hochul will include a "no tax on tips" proposal in her upcoming 2027 fiscal year executive budget, her office said Thursday.

The governor's office said the proposal will follow federal guidance that was included in President Donald Trump’s "One Big, Beautiful Bill," which allows qualified service workers to deduct up to $12,500 in tips from their taxable income each year and $25,000 for married couples filing jointly.

The proposal is part of Hochul's affordability agenda that is designed to help ease the financial burden on New Yorkers. The agenda also includes an increase in child tax credits and a middle class tax cut that is projected to deliver nearly $1 billion in tax relief to more than 8.3 million state residents.

“As we welcome in the New Year, affordability remains my top priority and I am doubling down on my commitment to put money back in New Yorkers’ pockets,” Hochul said. "I’m kicking the new year off with a proposal of no state income tax on tips, continuing my efforts to make New York more affordable for hard working New Yorkers.”

The governor also noted that the state's minimum wage will also increase starting Thursday, which will now be $16 an hour for most New Yorkers and $17 an hour in New York City, Westchester, and Long Island.

Misty Severi is a news reporter for Just The News. You can follow her on X for more coverage.