If you still claim your STAR tax credit as an exemption from your school tax bill, you could be missing out on the free money your neighbors are getting from New York State.
This is especially true for seniors in school districts with rising school tax rates. In the end, the system penalizes the people who are most likely to need the help.
Some seniors in the cities of Cicero, Clay, Geddes and Salina are losing about $100 a year for clinging to the old system, state tax records show. The table below shows the loss amount in each city in each school district for people using the legacy Enhanced STAR (for seniors) or Basic Star system in 2021.
Who is left out? Mostly people who have lived in their home for more than 7 years and like to visit the appraiser in person.
Former Governor Andrew Cuomo said in 2019 that it was coming. Cuomo proposed a state budget change this year that he hoped would encourage people to transition from the old local system to the new state system. The state created a fine for sticking with the old system. And it’s only going to get worse as school tax rates go up.
It’s a confusing concept and most homeowners are left to sort it out on their own.
This is how it works:
STAR stands for School Tax Relief. It reduces the appraised value of your primary residence so that the school tax rate is applied at a lower value. The base STAR benefit ranges from approximately $400 to $800 in most Onondaga County districts, and the Enhanced STAR benefit can be as high as $1,800.
You must live in the home you own and earn less than $500,000 per year for Basic STAR.
The rebate is higher for seniors over 65 who earn less than $92,000 per year. You are enrolling in the Enhanced STAR program.
When STAR was formed, everyone applied for the tax credit to the city or county assessor and the rebate was deducted from the school tax bill. The state repaid the school district.
Later, the state created a new system that applies the tax break as a credit to income tax. Just before school taxes are due, the state sends a check to every homeowner who has enrolled in the program. Then the homeowner pays the full school tax bill.
State officials argued that the new system would stop fraud – because the state tax agency knows your income each year and can more easily catch people applying for STAR for vacation homes.
Some local officials argue that this is less convenient for homeowners, who still need to come to the city appraiser for other types of exemptions, including a separate exemption for seniors with different rules in each municipality.
Over time, new government regulations have forced some homeowners to switch. If you bought a home after 2015, you had to apply for the state income tax credit. If you make more than $250,000 a year, you must use the new system.
But everyone else still has a choice. Many homeowners still enjoy visiting City Hall and going through the paperwork in person.
Despite the penalty, 2.2 million New Yorkers use the old system. About 771,000 people switched. According to the state tax agency, only 79,187 seniors use the new system.
The problem is this: if you stay with the old system, your STAR benefit level will be frozen at the 2019 level. It’s a state law. The amount can decrease but never increase.
If you use the state’s new income tax system, your STAR grant can increase by up to 2% each year as school taxes rise.
State officials call this an incentive. But the penalty for not switching to the old system is already being felt in some districts.
For example, individuals residing in the city of LaFayette and the Onondaga School District receive an expanded STAR rebate of $1,734 when deducted from their school tax bill. If they use the state system, they get $106 more.
One more thing: Due to the differences between Basic and Enhanced STAR, seniors are particularly affected by this new penalty. Enhanced STAR increases with inflation, but Basic STAR does not. As a result, the Enhanced STAR benefit may accrue faster than the Basic STAR benefit.
Here’s what you need to do: Apply for STAR credit. You only have to register once.
Use the website or call 518-457-2036.
The deadline for the timely changeover to this year’s school tax assessments has already passed. The deadline is two weeks before March 31 in Syracuse and two weeks before July 1 in suburbs.
Here are the deadlines in every city in upstate New York.
If you’ve already registered for the new system, you can check the state tax agency’s website to see when your STAR check is due.
This year’s state budget included a separate rebate review for STAR recipients. Approximately 2 million of these checks have been mailed. The rest is expected to come before school tax bills are due in September. If you qualify, you could get two checks this year.
This search will show if you can expect a homeowner tax rebate this year in addition to your STAR check or tax exemption.
This search shows the amount of STAR benefit for each city listed in the table above.
Read more about STAR:
Hochul plans to revive STAR rebate checks for homeowners in New York; Here’s how much you would get
NY Prefab Homeowners Can Now Receive STAR Property Tax Reductions; Here’s how to apply
NY property tax break for seniors causes more heartache than relief
NY Deducts STAR Benefits from Tax Dodgers; Raid inspired by story from syracuse.com
Contact Michelle Breidenbach | 315-470-3186 | firstname.lastname@example.org.