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TaxBuzz Top 5 - NY Nixes Property Taxes for Disabled Vets, Senator Pushes No Income Tax for Half of Americans & More

by
Rebekah Barton
on
3/6/2026
TaxBuzz Top 5 - NY Nixes Property Taxes for Disabled Vets, Senator Pushes No Income Tax for Half of Americans & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. NY To Exempt 100% Disabled Veterans From Property Taxes Statewide

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Credit: Spencer Platt/Getty Images

New York has approved a new law championed by Gov. Kathy Hochul that will exempt veterans with a 100% service-connected disability from local property taxes statewide, replacing a patchwork system that previously depended on whether individual municipalities opted in. Supporters say the move will deliver consistent statewide relief to veterans facing rising housing costs and limited earning capacity due to service-related injuries.

The exemption takes effect Oct. 1, 2026 and will apply beginning with the 2027 assessment roll, with eligible veterans generally required to apply through their local assessor using discharge papers and disability documentation. State officials say standardizing the benefit ensures uniform access while reducing administrative complexity for both veterans and local governments.

Advocates and lawmakers say the measure aligns New York with other states offering significant property-tax relief to severely disabled veterans and reflects growing bipartisan momentum for targeted tax relief as affordability pressures intensify nationwide. Critics note local governments will lose some property-tax revenue, though supporters argue the fiscal impact is manageable and justified by the policy’s equity goals.

The change also lands amid broader debates over property taxes in New York and across the U.S., where lawmakers are increasingly weighing exemptions, caps and structural reforms as part of larger efforts to address housing affordability and shifting tax burdens.

2. ‘No Tax On Overtime’ Adds Confusion and Complexity to 2026 Tax Returns

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Credit: Sasirin Pamai/Getty Images

As Americans file 2025 returns this season, many are discovering that the widely promoted “no tax on overtime” provision is more complicated than advertised. The rule — created under the 2025 federal tax overhaul — is not a full exemption but a limited deduction on the premium portion of overtime pay, meaning workers still owe payroll taxes and, in many cases, state income taxes on those earnings.

Under the law, eligible workers can deduct up to $12,500 in overtime income ($25,000 for joint filers), but only the extra half-time portion of “time-and-a-half” pay qualifies. The benefit phases out for higher earners starting at $150,000 for individuals and $300,000 for couples and expires after 2028 unless Congress extends it.

Tax professionals say the change is creating confusion because many filers expect overtime to be entirely tax-free. In practice, workers must track qualifying wages carefully and rely on updated reporting from employers to claim the deduction correctly on their returns.

Analysts also note the break will apply to a relatively small share of taxpayers overall and offers modest savings on average, highlighting how messaging around the policy differs from its real-world impact during the 2026 filing season.

The rollout reflects broader debates over the 2025 tax law’s mix of targeted deductions and messaging, and highlights how headline tax changes can translate into complicated reality once Americans actually file their returns.

3. Senate Democrat Proposes Eliminating Federal Income Taxes For About Half Of Americans

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Credit: Chip Somodevilla/Getty Images

Sen. Chris Van Hollen is set to introduce a sweeping “middle-class tax relief” plan that would eliminate federal income taxes for workers earning at or below a “living wage” — roughly $46,000 for individuals and $92,000 for married couples — a move that could affect about half of U.S. workers.

The proposal, currently backed by about 15 Senate Democrats, would increase the number of Americans paying no federal income tax from about 37 million to roughly 66 million, delivering significant relief to lower- and middle-income households.

To offset lost revenue, the bill calls for a new surtax on millionaires that supporters estimate could raise about $1.5 trillion over a decade, with rates of 5% on income above $1 million, 10% above $2 million and 12% above $5 million.

While unlikely to pass in the current Republican-controlled Congress, the measure positions Van Hollen and allies in shaping Democrats’ broader tax agenda ahead of the 2028 election cycle.

The proposal also reflects a growing national debate over how far tax policy should go in shifting burdens away from workers and onto high earners, especially as both parties compete to define the next phase of middle-class tax relief.

4. Nebraska Moves To Fix ‘Foreign Adversary’ Law To Preserve State Tax Incentives

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Credit: halbergman/Getty Images

Nebraska lawmakers are advancing a cleanup measure to clarify a 2025 law restricting business ties with foreign adversaries after companies warned the broad language was jeopardizing access to key state tax incentives. Lawmakers say the original statute unintentionally swept in Nebraska firms with routine operations in countries like China, threatening eligibility for economic development programs.

The revised proposal would narrow definitions and provide clearer guidance so companies with limited or indirect foreign ties are not automatically disqualified from incentives tied to job creation and investment. Supporters say the fix is needed to avoid harming Nebraska businesses competing globally while still addressing national-security concerns.

Business groups had cautioned that without changes, firms risked losing access to tax credits and other state benefits that help offset expansion costs. Lawmakers said salvaging those incentives is essential to maintaining Nebraska’s competitiveness for manufacturing and agricultural investment.

The debate highlights growing tension among states trying to balance economic development policy with geopolitical risk management as more legislatures adopt rules targeting business activity tied to foreign adversaries.

5. FIFA 2026 World Cup Raises Complex Cross-Border Tax Risks For Players and Staff

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Credit: Agustin Cuevas/Getty Images

The 2026 FIFA World Cup, hosted across the U.S., Canada and Mexico, is spotlighting a web of cross-border tax and social security challenges for players, coaches and support staff working temporarily across multiple jurisdictions. Tax experts say participants may face overlapping filing and payment obligations tied to where matches and related activities occur, even if they are not residents of those countries.

Under source-tax rules, host nations can tax income earned within their borders, meaning athletes and staff could owe taxes in multiple countries on salaries, match fees, bonuses, sponsorships and appearance payments tied to tournament activities. The complexity is compounded by varying national rules and how individuals are classified: as employees, contractors or, in certain nations, something that falls in between.

Treaty provisions may offer relief in some cases, but outcomes vary widely depending on funding sources and local interpretations. For example, certain tax treaty exemptions may apply if national teams receive substantial public funding, though definitions and documentation standards remain unclear.

U.S. state taxes add another layer of complexity: some states hosting matches, including New Jersey, do not honor federal treaty exemptions for state income tax purposes, meaning participants could face additional liabilities beyond federal obligations.

Advisers say careful planning will be essential to manage withholding, compliance and reporting across jurisdictions, underscoring how global sporting events can create unusually complex tax exposure for international workers and organizations alike.

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Feature Image Credit: Spencer Platt/Getty Images

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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