Recently, new measures and stimulus checks have been announced in the form of direct payments and tax reductions for homeowners in New York State. These initiatives, mainly under the STAR (School Tax Relief) and E-STAR (Enhanced School Tax Relief) programs, are designed to offer significant tax advantages to those who meet the established criteria.
While some homeowners may apply directly to the state to receive tax credits, others may be eligible for exemptions that directly reduce the amount payable on their property taxes. To be eligible for the basic STAR program, homeowners must have an annual income of less than $250,000. If the property is also the owner’s primary residence and the owner is 65 years or older, they can benefit from these tax incentives by the end of 2024.
Eligibility criteria for the stimulus programs
In New York State, the basic STAR and enhanced E-STAR tax relief programs have specific requirements that must be met to access their benefits. The home must be the primary residence of the owner to qualify for either program. Additionally, for the E-STAR program, at least one of the owners must be 65 years or older and live in the property as their primary residence.
These benefits can manifest as either tax exemptions or tax credits, depending on the location and the chosen modality, whether by the city of New York or by the state as a whole. The STAR and E-STAR programs aim to provide tax relief on property taxes, potentially reaching up to $1,400.
In cases of co-ownership, such as between siblings or spouses, only one of the owners needs to meet the 65-year age requirement by the end of the fiscal year in which the exemption is sought. The benefits of the E-STAR can be transferred to the surviving spouse in the event of the original beneficiary’s death.
Income limits are also a determining factor: applicants for the STAR credit must not exceed $500,000 in combined annual income, while the limit for the STAR exemption is $250,000. However, for both programs, in 2024, the total income must not exceed $98,700. It’s important to note that these limits apply to the total income of all owners and their spouses residing on the property.
Regarding property ownership, the applicant or applicants must be the legal owners of the property. For married couples not legally separated, only one STAR program can be used per property owned. Additionally, owners under executory sales contracts, also known as land contracts, are considered owners for the purposes of these programs. Corporations, partnerships, and LLCs, unless the property is used as farm housing, are not eligible for these benefits.
Receiving STAR benefits
New York residents who meet the requirements and enroll in the STAR program will receive their tax benefits in two main ways. For the STAR credit, the Department of Taxation will issue the benefit either by check or direct deposit. This credit can be used directly to pay the school taxes on the property.
On the other hand, the STAR exemption provides a direct reduction in the tax burden for school taxes. Those who have received the exemption since 2015 can continue to enjoy this advantage as long as they continue to meet the eligibility criteria. It is important to note that new homeowners cannot opt for the STAR exemption, a crucial consideration for those contemplating purchasing a home.
These tax stimulus measures in New York represent significant help for homeowners, providing financial relief and promoting the long-term sustainability of communities through support for local taxpayers. If you reside in the state and believe you might be eligible, it is recommended to carefully review the requirements and procedures to ensure access to these benefits.