Are you getting all the tax relief you are entitled to? Does that include the STAR benefit? And if so, are you aware of the recent changes to how you may receive your STAR benefit?
STAR (School Tax Relief) is a program offering savings on school-related taxes for NYS residents. All homeowners of a primary residence in NYS are eligible provided their income is $500,000 or less. There are two levels of STAR benefits, Basic and Enhanced. Enhanced STAR provides increased savings for qualifying senior citizens ages 65 and older.
STAR is not given automatically; it must be applied for. It is a one-time application process that is specific to the property and does not transfer. If a homeowner sells their primary residence and purchases a new primary residence in NYS, they must apply for STAR for the new property. There are currently two ways a homeowner can receive STAR benefits, and this is where the changes for 2019 come into play. The two programs are the STAR Credit program and the STAR Exemption program.
The STAR Exemption program is the original program that was introduced many years ago. With the Exemption, homeowners receive a direct reduction on their school tax bill in the form of a property tax exemption. This program still exists for homeowners who applied for it prior to the 2016 tax year. However, now this program has an income limit of $250,000. If you are currently receiving the STAR Exemption and your income does not exceed $250,000, you are able to continue as you are.
The STAR Credit program was instituted in 2016 for new applicants. Instead of an exemption, the Credit program provides for the homeowner to receive a check in the mail from the Tax Department each year, usually in the Fall around the time that school taxes are due. The income limit for the Credit program is $500,000. For homeowners who had the Exemption but whose current income exceeds that program’s $250,000 limit, they must now apply for the Credit program to continue receiving STAR benefits. With changes this year, the value of the STAR Credit has the potential of increasing by as much as 2 percent each year whereas the Exemption cannot increase. This is an incentive for homeowners with the Exemption to switch over to the Credit program, though the change is optional if they are still within the income limits.
For more information on STAR and to apply, visit the website at: www.tax.ny.gov/star, or contact your local real estate experts at ERA Insite Realty in Pleasantville, 914-769-2222, for guidance and answers to your questions.