A Column of News & Comment by Senator James L. Seward
One of the most beneficial property tax savings we have in New York State is the School Tax Relief (STAR) program. The program helps make homeownership more affordable and adds extra savings for senior citizens so they can stay in their homes and communities. I have supported STAR since its inception, and have worked to protect and grow the program every year since.
Basic STAR is available to all New Yorkers with an income of $500,000 or less who own and live in their one-, two-, or three-family home. The program exempts $30,000 of the full value of a home from school taxes and is available to all income-eligible homeowners regardless of age. Eligibility is reviewed annually by the New York State Department of Taxation and Finance and as long as you continue to own and occupy your home, you will continue to receive the benefit.
Senior citizens are eligible for additional savings through the Enhanced STAR program. One important thing to consider – if you, or your spouse, turn 65 any time this year you are eligible for Enhanced STAR. There are also different income conditions, which are adjusted slightly each year, to keep in mind.
Currently, to be eligible for Enhanced STAR, your income must be no greater than $88,050. Eligibility is based on the combined incomes of all the owners of and any owner’s spouse who resides at the property. Income is defined as federal adjusted gross income (as reported on federal or state income tax returns) minus the taxable amount of total distributions from IRAs. The Enhanced STAR exempts $68,300 of the full value of a home from school taxes.
The first step in applying for the Enhanced STAR program is to submit form RP-425-IVP with your local assessor. This must be done by your local deadline to receive benefits this coming fall. In most cases, the deadline is March 1 so the clock is ticking.
There has been an important change in the Enhanced STAR application process that I want to point out. If you are applying or reapplying for the Enhanced STAR exemption, you must enroll in the Income Verification Program (IVP). You only need to enroll once, and you’ll receive the exemption each year, as long as you’re eligible. If you are already enrolled in the IVP no action is required.
There have been several modifications made to the Basic STAR program in recent years. While I have been opposed to many, because I feel they add undue complications, it is important that you understand the changes.
Starting in 2019, those with a household income between $250,000 and $500,000 have been shifted to a credit program. Simply put, those individuals and families will receive a check from the state rather than an automatic deduction from their school tax bill. The idea is for the homeowners to apply that check from the New York State Tax Department to their school taxes.
Additionally, all new homeowners who enroll in the program receive the credit check. Essentially, only people who previously received the exemption are eligible to continue in that segment of the Basic STAR program.
Homeowners currently enrolled in the exemption program may also switch to the credit program and there is an incentive to do so. The exemption savings are now frozen, but the value of the STAR credit savings may grow by as much as 2 percent from year to year.
Again, the difference between the Basic STAR programs is how the savings are received:
- The STAR exemption is a deduction from your school tax bill and is only available to those already enrolled;
- The STAR credit is a check sent directly to you.
If you are a homeowner and aren’t already receiving STAR or Enhanced STAR, or would like to switch from exemption to credit, I encourage you to visit the NYS Tax Department website for additional information – www.tax.ny.gov/star.