A Lookback on Important Developments from 2025
What you need to know as we enter the New Year
In 2025, my colleagues and I reported on several developments in the law regarding our main practice areas, including trusts and estates law, guardianship, and estate planning. I thought it would be helpful to look back on that reporting and give some reminders and updates for the New Year.
Income Tax Changes for 2026
The One Big Beautiful Bill Act (OBBBA) signed by President Trump on July 4th of last year ushered in some significant changes to the tax law. I wrote an article last July covering these changes (https://saratogatodaynewspaper.com/july-11-july-17-2025-2/). Some highlights to keep in mind for the New Year, include four new temporary deductions: 1) up to $25,000 for tip income, 2) up to $12,500 for individuals and $25,000 for joint filers for overtime income, 3) $6,000 for taxpayers 65 and older, and 4) up to $10,000 for car loan interest for cars which have their final assembly in the U.S. All four of these new temporary deductions could result in significant savings for taxpayers, but they are all subject to income phaseouts. Another highlight is a quadrupling of the State and Local Taxes (SALT) deduction cap from $10,000 to $40,000 for taxpayers that itemize deductions.
Tax Changes for Education in 2026
The OBBBA expanded the use of 529 educational savings accounts by increasing the annual amount that can be used for K-12 expenses from $10,000/year to $20,000/year. It also increased allowable withdrawals in general, including allowing withdrawals to pay for programs that prepare students for industry-recognized licensing exams.
Estate Tax Changes for 2026
The estate tax exemption levels for New York State and the federal government both increased in 2026. The New York State estate tax exemption amount is now $7,350,000 and the federal exemption amount is now $15,000,000. The federal annual exclusion amount for gifting remains at $19,000 per beneficiary per year, which is unchanged from 2025. This is the amount of money you can give to a beneficiary without the necessity of filing a federal gift tax return (Form 706).
Trump Accounts in 2026
Trump accounts can be established starting in 2026 for children born between 2025 and 2028. If you elect to establish a Trump account for a child born during that time, the federal government will make a one-time $1,000 contribution to the account. Starting in July of 2026, additional contributions may be made by anyone who wishes to do so, subject to certain limits. These accounts are tax deferred investment accounts, which can be converted to Individual Retirement Accounts (IRAs) when the child turns 18. More information on these accounts may be found in my colleague Anna Myers Norton’s article in November of last year (https://saratogatodaynewspaper.com/november-14-november-20-2025/).
Developments re: NY LLCTA
New York’s Limited Liability Company Transparency Act (LLCTA) required owners of corporate entities to report their identities to New York State. The required Reporting Companies follow the federal Corporate Transparency Act (CTA) requirements. My colleague James Wighaus reported last April that the federal CTA was significantly limited to apply only to foreign corporate entities (https://saratogatodaynewspaper.com/april-11-17-2025/). Since the LLCTA followed the federal standard, it also only applied to foreign corporate entities. The New York legislature passed an amendment to the New York law to expand the application to corporate entities formed in the United States. In December of last year, Governor Hochul vetoed the proposed amended legislation, leaving the application of the LLCTA only to foreign corporate entities. By limiting the application of New York law to conform with the federal standard, the Governor arguably prevented a significant regulatory burden from being imposed on New York businesses.
Developments re: the MAID Act
In August of last year, Anna Myers Norton reported on the status of New York’s proposed Medical Aid in Dying Act (MAID Act) (https://saratogatodaynewspaper.com/august-15-august-21-2025-3/). The MAID Act had been passed by both the New York State Senate and Assembly and was awaiting signature by Governor Hochul. In December of last year, Governor Hochul announced she had negotiated changes in the law with the legislature and that she would sign the bill into law this month. The MAID Act will allow terminally ill New York residents to obtain prescription drugs from a medical professional to aid them in ending their lives. A detailed explanation of the negotiated changes is beyond the scope of this article, but I thought it important to update our readers that the MAID Act will become law in 2026.
I hope you find this overview of updates and reminders helpful. A lot happened in 2025, and it certainly seems like 2026 is going to be no different. I informed you last month that our firm – O’Connell and Aronowitz – celebrated its 100th anniversary in December. We have additional exciting news for this year. We will be moving our Albany office at 54 State Street to 6 Airport Park Boulevard in Latham, where we will be occupying the entire building with our 32 attorneys and their support staff. We are very excited about the move, and we look forward to serving our clients better out of our new location. Our Saratoga office, which has been operating for almost 16 years now, will continue to operate and be available to our clients, as well. On behalf of O’Connell and Aronowitz, I wish you all a safe and prosperous 2026!
Matthew J. Dorsey, Esq. is a Shareholder with O’Connell and Aronowitz, 1 Court Street, Saratoga Springs, NY. Over his twenty-nine years of practice, he has focused in the areas of elder law, estate planning, and estate administration. Mr. Dorsey can be reached at (518)584-5205, mdorsey@oalaw.com and www.oalaw.com.