Homeowners in New York have the opportunity to save on property taxes through the New York School Tax Relief Program, or STAR. This initiative provides up to $2,000 annually, either as a tax credit or exemption, offering significant financial relief. Knowing the eligibility criteria and application process is essential for homeowners who want to take advantage of this benefit.
There are two versions of the STAR program: the basic STAR and the enhanced STAR (E-STAR). Each program targets specific groups, providing tailored relief based on income, age, and residency status.
STAR Program
The STAR program helps New York homeowners by reducing the amount they pay in property taxes. It comes in two forms:
- Basic STAR: Provides property tax relief to homeowners of all ages, with income limits.
- Enhanced STAR (E-STAR): Specifically for homeowners aged 65 and older, offering greater relief but with stricter income requirements.
Both programs are designed to help alleviate the financial burden of property taxes, making homeownership more affordable.
Who Qualifies
The STAR program offers property tax relief in two forms: a direct credit check or an exemption from property taxes. Whether you receive a check or an exemption depends on your personal and financial situation.
Eligibility
The basic STAR program is open to homeowners of any age, with these primary requirements:
- The property must be your primary residence.
- The total income of all owners and resident spouses cannot exceed $250,000 annually.
- The income limit is based on the federal adjusted gross income, excluding taxable distributions from individual retirement accounts (IRAs).
The estimated tax reduction for basic STAR beneficiaries is around $290 per year. For younger homeowners or those with moderate incomes, this relief can help ease annual property tax burdens.
E-STAR for Seniors
The E-STAR program is targeted at seniors aged 65 and older. To qualify:
- Homeowners must be 65 years or older before the start of the exemption period.
- The combined income of all property owners and resident spouses must not exceed $93,200 for 2023 (rising to $98,700 in 2024).
For seniors, the benefit is significantly higher than the basic STAR program, providing around $650 in annual property tax savings. This additional relief is especially beneficial for retirees living on a fixed income.
How to Apply
Applying for the STAR or E-STAR benefit is a straightforward process that begins with submitting an application to the New York State Department of Taxation and Finance. If you’re eligible, you can choose to receive the relief as a check or an exemption on your property taxes.
Here’s what you’ll need to do:
- Submit an Application: Fill out the required forms through the New York State Department of Taxation and Finance.
- Switch from Exemption to Credit: If you’re already enrolled in the STAR exemption program, you may want to switch to the credit option. The credit can increase annually, whereas the exemption remains static.
The flexibility to receive a direct check can provide a financial cushion, especially when property taxes are due, or it can serve as extra income for other expenses.
Documentation
To apply for the STAR program, you’ll need to provide several important documents:
- Income Verification: All owners and resident spouses must submit income documents, with calculations based on your federal adjusted gross income. IRA distributions that are taxable should be subtracted from the total income.
- Proof of Age: For E-STAR applicants aged 65 or older, valid documentation like a government-issued ID is required to confirm age eligibility.
- Ownership Documents: If the property is co-owned with a spouse or sibling, documents verifying their age and relationship must also be submitted.
Ensuring you have the correct paperwork in place will help avoid any delays in the application process.
Benefits
By applying for the STAR or E-STAR program, homeowners can save a considerable amount on property taxes. With the rising costs of living, especially in periods of inflation, reducing fixed expenses like property taxes can significantly ease financial stress.
Why It’s Worth It
- Direct Financial Relief: For eligible homeowners, the relief is either in the form of a check or a reduction on their property tax bill.
- Extra Income: For those receiving a credit, the check can serve as extra income to cover other essential expenses.
- Long-Term Savings: Switching to a credit from an exemption allows homeowners to benefit from potential annual increases, maximizing tax savings over time.
Applying for the STAR or E-STAR program is a smart move for eligible homeowners, providing both immediate and long-term financial relief. Whether you’re a younger homeowner or a senior looking for tax savings, this program can help lower your housing costs and free up funds for other important financial goals.
FAQs
Who qualifies for the basic STAR program?
Homeowners with a total income of less than $250,000 qualify for basic STAR.
What is the benefit of the enhanced STAR program?
E-STAR offers about $650 in tax relief for homeowners aged 65+ with incomes under $93,200.
How do I apply for the STAR credit?
Apply through the New York State Department of Taxation and Finance to receive the credit.
Can I switch from the STAR exemption to the STAR credit?
Yes, switching from exemption to credit is possible and often recommended for long-term benefits.
What documentation do I need for the STAR program?
You’ll need income verification, proof of age (for E-STAR), and property ownership documents.
