School Taxes High? STAR Provides Some Relief
By Carol O'Biso
From Issue 45: Winter 2020
Most of us are aware of the School Tax Relief (STAR) program, which provides homeowners in New York State with relief on their school taxes. It’s necessary to register on or before March 1, 2020, and it’s only necessary to register for Basic STAR once, so if you’ve already filed, you don’t have to do it again. Keep reading though; there are some recent changes that might be of interest, and you might qualify for some exemptions other than Basic STAR that will require an application.
Now fasten your seat belts; the state likes to make things as complicated as possible, so it could be a bumpy ride …
While our Tax Assessor, Maureen Gallagher, will always have to confirm your eligibility, the STAR program’s pre-mise is very simple: if you own your home, it’s your primary residence, and your income is $500,000 or less, you qualify for the STAR credit program.
Up until March of 2015, if your income was $250,000 or less you qualified for the STAR exemption program. The difference is that the exemption—which is now closed to new applicants—reduces your school tax by the amount of relief you’re entitled to. With the STAR credit, you pay the full amount of your school taxes and later receive a rebate check for the amount from the New York State Department of Taxation and Finance.
Those of us who have the exemption—about 80% of Gardiner residents—might want to consider switching to the credit and receive a check instead. Yes, it means you first have to pay the full tax up front, but beginning in 2019 the value of the STAR credit savings may increase by up to 2% a year, while the value of the STAR exemption savings cannot increase.
A catch is that the increase is 2% of the amount of the credit, not 2% of your entire school tax bill. The STAR exemption is often around $600 a year, so that’s an extra $12 a year to be gained by switching to the credit. To get that extra dollar a month, you have to notify Maureen Gallagher in writing that you want to cancel or remove your Basic STAR exemption, then contact the Department of Tax and Finance to apply for the Basic STAR credit. If you pay your property taxes monthly through an escrow account, you’d also have to notify the bank that holds your mortgage so that adjustments can be made to your payments.
Now, you probably have no idea if you have the credit or the exemption. And you probably can’t remember if you applied before March of 2015, which would confirm that you have the exemption. You might even conclude that you must have the credit, because you do receive a property tax rebate check from the state once a year. Well, there’s another property tax rebate check that comes in the mail from the state. It is separate from the STAR rebate and for a much lesser amount than the typical $600-ish that the STAR check would be.
To tell if you have the credit or the exemption, look at your school tax bill instead. Those with the STAR exemption will see an amount deducted, with a note that it is “your tax savings resulting from the STAR program.”
So, if you’re not numb yet, let’s sum all that up as succinctly as possible:
• For all categories of STAR you have to own your home, it has to be your primary residence, and Maureen Gallagher has to verify that everything complies.
• You qualify for the Basic STAR credit if your 2018 income was $500,000 or less. Remember that you only have to apply for this once. An additional application is necessary only if you eventually qualify for any of the other exemptions below, or if you have the pre-2015 exemption and want to switch to the credit.
Here are other STAR categories you may qualify for now, or come to qualify for in the future
• If your 65th birthday is anytime in 2020, your 2018 household income was $88,050 of less, and you have the pre-2015 Basic STAR exemption, you qualify for Enhanced STAR but will have to visit the assessor’s office to apply. If you already have the Basic STAR credit, the NYS Department of Taxation and Finance will be aware of both your age and your income, and will automatically apply the Enhanced STAR amounts if your income is below the maximum amount.
• If you are 65+ and your household income for 2018, including Social Security, was $37,399 or less, or if you have already been receiving Enhanced STAR and your income has been reduced to this level, you also qualify for the Senior Exemption. You’ll have to renew this one annually, by speaking to the assessor.
• The Veterans’ Exemption is available if you or your spouse served during wartime. You must visit the assessor’s office to apply, and must bring your discharge papers (DD214).
• The Cold War Veterans Credit is available if you served during the period 1945 to 1991 and you receive no other veteran’s exemption.
Maureen Gallagher is there to assist us! She welcomes our calls at 845 255-9675, extension 104 or 105. And remember, if you’re filing for Basic Star for the fist time, applying for Enhanced STAR, switching from the exemption program to the credit program, or applying for the Senior Exemption, forms must be filed on or before March 1, 2020.