There is no easy guide to STAR - New York state’s system of offering property tax relief to overburdened homeowners.
STAR, or the school tax relief program, has evolved into a confusing system of discounted school tax bills for one type of taxpayer and state income tax refund checks for another. There are age thresholds and income limits. You get more money if your school district keeps its spending in check.
We invited readers to let us help sort it out. We answered 10 reader questions about the program:
Q: I was appalled to just learn that someone who is two years delinquent in property taxes just received a large STAR rebate check. How do you get a rebate when you haven't paid?
A: It turns out, the state tax department does not check on delinquent property taxes before it sends an income tax credit check to homeowners. The state can recover the money if it is discovered in an audit. The tax department will not say how many times this type of fraud has been discovered.
Q: If I do not owe New York state income taxes, will I still be eligible for an income tax credit for STAR?
A: Yes. STAR started out as a direct discount on school property tax bills. Now, the state is transitioning taxpayers to a new system that offers a credit on state income taxes. If you don’t owe state income taxes, you are still eligible for the STAR credit check to help you pay your school property taxes.
The state sends income worksheets to property owners who aren’t required to file income taxes. The state can also take the information over the phone, a tax department spokesman said.
Q: We own a summer camp and our own home. We get charged full price at the summer camp. Does that ever change at a certain age or are there any discounts that you can get for it?
A: The STAR benefit only counts on your primary residence. Check with your town or city assessor to see if you qualify for another type of discount.
The state assessor’s manual has a list of exemptions.
Q: I received two NY State rebate checks. One check stated it was for the STAR program and the other one was for tax relief. I do not understand the tax relief check. Please let me know if the second check was supposed to be sent to me and why.
A: Yes. It is possible for homeowners to get two checks. One check goes to people who take the basic STAR or enhanced STAR tax break as a credit on their New York state income taxes rather than a discount on their school property taxes. The check is supposed to come before your tax bill is due so you can use it to pay your school taxes.
This check is only for people who bought their homes after mid-2015, people who make between $250,000 and $500,000, and others who chose to have the state tax department handle their STAR accounts.
A second STAR check is called the Property Tax Relief Credit.
It’s a reward for homeowners who live in a school district that keeps its spending under the state’s limit.
This check goes to homeowners who are signed up for basic or enhanced STAR, have an income of less than $275,000 and live in a school district that stays under the property tax cap.
The amount is a percentage of your basic star savings and it’s based on your income. If you make $75,000 or less, the amount is 85 percent of your STAR savings.
If you have Enhanced STAR, the credit is 34 percent of your Enhanced STAR savings regardless of income.
The state tax department automatically sends checks to people who are eligible for this.
Eligible homeowners in Central New York should have received both checks by now. The state has mailed 503,725 STAR checks and 1.8 million tax relief checks, a spokesman said.
If you believe you are eligible for a check and have not received one, call the state tax department at 518-457-2036.
Q: Are the relief checks going to continue beyond 2019?
A: That is up to the New York State Legislature and Gov. Andrew Cuomo.
Q: If you elect to receive the STAR credit as a check, is it considered taxable income?
A: Yes. It will be taxed. But you will be able to take more of a property tax write-off on state income taxes for paying the full amount to the school district. The state budget division staff said that makes it a wash.
Q: Do you need to reapply every year for Enhanced STAR. Do I need to show income verification every year?
A: No. Starting this year, you need to show your income to your local assessor. In years after that, the state will verify your income. You don’t need to reapply every year.
Be aware, there is a separate senior citizen exemption that you do have to apply for every year with your local assessor. It applies to all property taxes – county, city, town, village and school district. It has a different process and different income guidelines that are not the same in every municipality.
Q: How old do I have to be to be eligible for enhanced star?
A: 65 with an income of $88,050 or less for the 2020-21 school year.
Q: Do homeowners whose homes are worth $50,000 get the same basic star deduction of $30,000 as homes worth $150,000?
A: Yes. There is an income limit, however. You have to make less than $500,000 a year to qualify for Basic STAR. (Note: Municipalities that do not assess property at 100 percent of market value have lower deduction amounts.)
Q: Is there a way to make sure that I am signed up and receiving all of the discounts and rebates?
A: You can call the New York State tax department at 518-457-2036. They are open weekdays from 8:30 a.m. to 4:30 p.m. You should also call your town assessor to check on local exemptions.
Contact the author: Michelle Breidenbach | mbreidenbach@syracuse.com | 315-470-3186
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