State tax rebates are on their way this fall

The checks are in the mail.

Eligible homeowners in New York state are seeing checks in the mail this fall under two initiatives related to the School Tax Relief Program: the STAR credit and the Property Tax Relief Credit.

Any STAR-eligible homeowners who paid property taxes for the first time in 2016 or 2017 will receive a rebate check for their STAR savings. This is a change from past practice when having STAR meant seeing an exemption, or reduction, in a homeowner’s property tax bill. The change is for new homeowners only; it does not affect homeowners who currently receive a STAR exemption.

Some homeowners also will receive a rebate check for the Property Tax Relief Credit. In year two of the new tax relief program, rebate amounts have changed from fixed dollar amounts based on residential location to income-based percentages of STAR savings. The state expects homeowners to receive their 2017 rebate checks in November, following a delayed rollout last year that saw some homeowners waiting until February to receive their 2016 rebate checks.

Here is an overview of the two types of credits

School Tax Relief (STAR) Credit

Under the School Tax Relief program, Basic STAR and Enhanced STAR exemptions have helped homeowners reduce what they owe on their school tax bills since the program was launched in 1998-99.

In 2016, the state stopped issuing new exemptions. New STAR applicants instead now receive a rebate check under the STAR Credit Program. Homeowners who qualify for a STAR credit will see on their school tax bills a statement that a STAR reimbursement check will be mailed to them upon issuance by the state Department of Taxation and Finance. They will not see a STAR exemption amount.

The state posted a timeline of when to expect STAR credit checks at https://www.tax.ny.gov/pit/property/star/timeline-summary.htm

For homeowners who currently receive a STAR Exemption on their primary residences, there is no change; they will continue to receive an exemption. Homeowners’ STAR savings amounts remain the same whether they receive an exemption or a rebate check.

The School Communications Portfolio released a fact sheet on STAR, the STAR credit and the Property Tax Relief Credit in fall 2016. View the fact sheet for more information on Basic and Enhanced STAR exemptions.

Property Tax Relief Credit

Under the Property Tax Relief Credit, New York homeowners may be eligible to receive a rebate check from the state during a four-year period that ends in 2019.

Homeowners are eligible for the rebate as long as they:

  • Own a home that receives an exemption through the School Tax Relief (STAR) program;
  • Have a gross income no greater than $275,000; and
  • Reside within a tax-cap compliant school district. For a school district to be considered tax-cap compliant, the district’s tax levy must remain within its property tax levy limit. SCOTIA-GLENVILLE’S TAX INCREASE IN 2017-18 WAS BELOW THE STATE’S TAX LEVY LIMIT THRESHOLD.

Each home may only receive one Property Tax Relief Credit.

In 2017, rebate amounts for Basic STAR-eligible homeowners are based on income levels and a percentage of their STAR savings as follows:

  • Income of $75,000 or less receives a rebate for 28.0% of Basic STAR savings
  • Income of between $75,000 and $150,000 receives a rebate for 20.5% of Basic STAR savings
  • Income of between $150,000 and $200,000 receives a rebate for 13.0% of Basic STAR savings
  • Income of between between $200,000 and $275,000 receives a rebate for 5.5% of Basic STAR savings
  • Enhanced STAR-eligible homeowners receive a rebate for 12.0% of their STAR savings, no matter their income level.

The dollar amounts of the rebate will continue to vary in 2018 and 2019 on a sliding scale based on income. Visit www.tax.ny.gov/pit/property/property-tax-relief.htm to learn more.