Important - Nassau County Filing Deadline March 1, 2024
Part 1: Homeowners earning between $250,000 and $500,000 a year will get a check for their STAR rebates this year, rather than receiving the savings directly in their school-tax bills.
Part 2: Any STAR recipient that doesn’t switch to a check will miss out on the two percent increase in their tax savings this fall.
The changes won’t impact eligibility – just whether homeowners receive the rebates in a check or in their school-tax bills, and not everyone will feel the change.
Those who owned their homes before Aug. 1, 2015, and earn less than $250,000 a year, will still get the STAR savings in their tax bills unless they opt for the check.
If property owners want to switch to the STAR credit program, the New York State Department of Taxation and Finance suggests that they register as soon as possible, and no later than two weeks prior to the date when the final assessment roll is published.
A spokesperson for the tax department said the system is working well and that homeowners should feel confident they will get the checks prior to when their school taxes are due.
Last year, the agency said it issued 99.5% of STAR credit checks prior to the school tax bill due date.
The School Tax Relief (STAR) program is a property tax rebate program available to New Yorkers whose household income is $500,000 or less – only primary residences are eligible. Around 2.6 million homeowners in New York receive the STAR tax break, which averages to around $790 per year per household.
The tax break is part of a $3 billion program that started in the mid-1990s, which helps New Yorkers curb the impact of having among the highest school taxes in the nation.
Why the Changes?
Under the previous system, schools give homeowners the STAR savings and then get reimbursed by the state — which showed up as a budget expense for the state. The new system gives the savings directly to the homeowners in a check, so it counts as a “personal income tax credit,” and shows up in the state budget as a reduction in tax revenue – not as state spending.
That change is sizable for the state’s finances. The new system is estimated to lower spending by $238 million in the fiscal year. Plus, capping the growth in the program for those who don’t get a check is another potential money-saver for the state.
Critics have asserted that the STAR program’s alterations have created falsities in the state’s budget by changing how the program functions, from a homeowner’s property tax discount to a state-issued ‘personal income tax credit’ that is issued as a check. According to an article in lohud. the Director of State Studies for the Citizens Budget Commission, David Friedfel asserts “the state is able to artificially make state spending appear lower than it is.”
The state defended the changes, however, saying it will help cut out fraud in the program and streamline payments. The goal of the changes, as explained by Freeman Klopott, spokesman for the state Budget Division, is to transfer people to the credit program, which is more efficiently administered. This will help to prevent abuse of the system. It will also separate the STAR savings from the tax bill, making districts more accountable to taxpayers.
What About Mortgage Escrows?
The changes will impact homeowners who pay their taxes through a mortgage escrow because they will pay more per month to cover the taxes, and then have to wait for reimbursement through the STAR check.
Are Seniors Affected?
Senior citizens who get Enhanced STAR are not impacted by the changes and will still get the savings upfront on their tax bills although those receiving Enhanced STAR will now have to enroll in an income-verification program to get the rebate. Enhanced STAR is available to homeowners age 65 and older with incomes of $86,300 or less. This program benefits 665,000 seniors and averages $1,400 a year.
For more information on the STAR program or to register, please visit https://www.tax.ny.gov/pit/property/star/default.htm.