By Eva Potter
New legislation was recently passed requiring all homeowners receiving a Basic STAR exemption to register with the New York State Tax Department. The measure is part of a new initiative to protect New Yorkers against inappropriate or fraudulent STAR exemptions.
Homeowners who currently receive the Basic STAR (School Tax Relief) exemption should have received a letter from the New York State Department of Taxation with instructions on how to apply for the Basic STAR exemption for 2014 and subsequent years. The letter contained a STAR code unique to each homeowner for use during the registration process.
Who Must Register?
If you are a resident homeowner and currently receive the Basic STAR exemption, you are required to register before Dec. 31, 2013, to continue receiving this benefit. Homeowners do not need to register in order to receive their 2013 STAR exemptions and they will not have to reregister every year. The Tax Department will be able to verify homeowners’ eligibility in the future based on the information provided during registration. Registration runs through Dec. 31, 2013.
If you are a resident homeowner applying for Basic STAR for the first time, you are not affected by this new registration procedure and will still use form RP-425 to be filed with your local assessor.
According to www.tax.ny.gov, “If you are receiving Basic STAR but will be eligible for Enhanced STAR in 2014, you should apply for Enhanced STAR with your assessor, and register for Basic STAR with the Tax Department (to ensure you keep the Basic STAR if the assessor determines you’re ineligible for the Enhanced STAR).
What About Enhanced STAR Recipients for Seniors?
The new registration process does not affect seniors who receive the Enhanced STAR exemption. ONLY Basic STAR recipients need to register. Recipients of the Senior STAR (aka Enhanced STAR) DO NOT NEED to do anything at this time. Seniors will not be mailed new instructions from the Tax Department.
According to www.tax.ny.gov, “Senior citizens receiving Enhanced STAR are not affected by the new registration requirement. Seniors must, however, take steps to ensure that they continue receiving Enhanced STAR. Seniors receiving Enhanced STAR who reside outside of New York City [this includes Cattaraugus County] must continue to apply annually, OR participate in the Income Verification Program.”
To participate in the Income Verification Program is easy and your local assessor can answer your questions.
How Do I Register?
The easiest and most efficient way to register is by going to the Tax Departments website at www.tax.ny.gov. Please have your STAR code available as you will need it during the registration process. If you have lost your STAR code, you can retrieve it through an online lookup or by calling the Tax Department at (518) 457-2036.
The online registration process will ask you a series of questions in order to process the application including:
STAR code and property address
Names and social security numbers of all owners of the property and spouses
Confirmation that the property is the primary residence of one of its owners (married couples with multiple residences may only claim one STAR exemption)
Confirmation that the combined income of the owners and their spouses who reside at the property does not exceed $500,000
Confirmation that no resident owner receives a residency-based tax exemption from another state
If you are unable to register online, you may do so by telephone by calling (518) 457-2036 during business hours (Monday–Friday, 8:30 a.m.–8 p.m., and Saturday, 9 a.m.–1 p.m.).
You may also call this number to receive support with questions about online registration.
What if I Forget to Register?
It’s easy to forget in this fast-paced world, but a reminder system has been built into the registration process. The Tax Department will send homeowners additional reminder letters in December 2013 and January 2014.
In February 2014, assessors will receive a list of homeowners who have not registered or who were ineligible to receive the STAR exemption. The assessment role entries for these homeowners will not include the STAR exemption.
Please note that homeowners who were found ineligible for STAR will have the right to administrative review within the Tax Department and review before the State Board of Real Property Tax Services.
Am I Eligible for STAR?
If you own a house, condominium, cooperative apartment, manufactured home, farmhouse, mixed-use property (including apartment buildings, but only the owner-occupied portion), then you may be eligible for Basic or Enhanced STAR exemptions. You must own this home and this must be your primary residence.
Basic STAR has no age restriction and applicants must have an annual income of $500,000 or less. This income limit applies to the combined incomes of only the owners and owners’ spouses who reside at the property.
To qualify for Enhanced STAR, you must be age 65 or older. For jointly owned property, only one spouse or sibling must be at least 65 years by Dec. 31 of the year when the exemption will begin. The income limit is $81,900 and applies to all owners, and any owner’s spouse who resides at the property.
To determine your primary residence, your local assessor will consider many factors to determine whether a property is your primary residence including voter registrations, vehicle registrations and length of time spent each year on the property. The assessor may ask you to provide proof of residency with your STAR application, as well as after granting the exemption to verify that it remains your primary residence.
Income eligibility in 2014 is based on income information from the 2012 tax year. Income means federal “adjusted gross income” minus the “taxable amount” of total distributions from individual retirement accounts or individual retirement annuities (IRAs).
You will find special eligibility rules for seniors, residents of cooperative apartments, manufactured home parks, nursing homes, trusts and life estates at www.tax.ny.gov/pit/property/star/special_eligibility.htm.
How Much Can I Save?
Most STAR recipients save several hundred dollars. Savings are affected by your property’s assessed value that is exempt from property taxes due to STAR, taxes collected by your school district and prior year’s savings (STAR savings cannot increase by more than 2 percent).
Exemptions may vary based on property location, a recent municipality reassessment, the level of assessment of the individual municipality and the annual adjustment based on the rate of inflation (Enhanced STAR only).