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Tax Savings Through the STAR Credit Program is Currently Higher Than the STAR Exemption

By in Fairport NY News

The School Tax Relief (STAR) exemption authorized under Real Property Tax Law Section 425 provides a partial exemption from school taxes for most owner-occupied primary residences, one, two, or three-family residences, a farm dwelling, residential property held in a condominium or cooperative form of ownership, or a mobile home. The exemption was signed into law on August 7, 1997.

As of 2016, the STAR exemption is no longer available to new applicants. New applicants must instead register with the State and receive the STAR savings in the form of a check directly from New York State, known as the STAR Credit.

Homeowners with existing STAR exemptions may continue to receive the exemption. When eligible, they may upgrade from the Basic STAR to the Enhanced STAR exemption and receive the full additional saving amount to which they are entitled.  

Due to a law change in 2019, the amount of the STAR exemption savings will no longer increase, but the STAR Credit can still increase by as much as 2% annually. As a result, the STAR Credit is more than the STAR exemption savings in many cases.

This is especially true for the Enhanced STAR Credit vs. the Enhanced STAR exemption savings because Enhanced STAR is increased statutorily in most years. In the Town of Perinton, seniors receiving the Enhanced STAR Credit can realize an additional STAR saving ranging from $32 to $140, depending on the school district. Special Note: Actual savings will be lower if your total taxable assessment is not high enough to provide for the maximum STAR savings listed below.

Below is a table comparing the additional maximum savings between the STAR Credit vs. STAR exemption by school district within the Town of Perinton:

2022 final STAR Credit Check Vs. STAR Exemption maximum savings amounts

Link to NYS website table:  2022 STAR credit and STAR exemption savings amounts

MunicipalitySchool districtEnhanced STAR Credit Maximum CheckEnhanced STAR exemption maximum savingsDifference between Enhanced STAR Credit and exemption savings Basic STAR Credit Max CheckBasic STAR exemption maximum savingsDifference between Basic STAR Credit and exemption savingsTown of PerintonPenfield$1,661.00$1,629.00$32.00 $705.00$691.00$14.00Town of PerintonFairport$1,556.00$1,437.00$119.00 $656.84$650.00$6.84Town of PerintonEast Rochester$1,841.00$1,701.00$140.00 $801.00$785.00$16.00Town of PerintonPittsford$1,776.00$1,641.00$135.00 $757.00$743.00$14.00Town of PerintonVictor$1,122.00$1,037.00$85.00 $490.00$461.00$29.00

Homeowners already receiving the STAR exemption can switch to the STAR Credit anytime throughout the year. However, if you change after June 15th, you will receive the STAR exemption for that year, and the STAR Credit check will begin the following year. However, if the current year’s STAR Credit is larger than the STAR exemption savings, the State will add the difference to your STAR Credit check the following year.

If you would like to switch or currently do not have a Basic or Enhanced Star exemption, you must register with the NYS Department of Taxation and Finance:  

Go to: https://www.tax.ny.gov/pit/property/star/

Or call (518) 457-2036

Other Required Qualifications for STAR Credit until December 31, 2022

For the Basic STAR – the applicant must be an owner, and the property receiving the exemption must serve as the primary residence of at least one property owner.

Basic STAR Credit – Maximum allowable income for 2022 is $500,000 based on your 2020 income tax return. After January 1, 2023, your income will be based on your 2021 income.

For the Enhanced STAR Credit – all owners must be at least 65 years old by December 31, 2022 (unless owners are husband & wife or sibling co-owners; then, only one owner needs to be 65, but the property must be the primary residence of the owner who is age-eligible).

Enhanced Star Credit – Maximum allowable income for 2022 is $92,000 based on your 2020 income tax return. After January 1, 2023, the maximum income will be $93,200 based on your 2021 income.

Income eligibility is calculated using the adjusted gross income minus the taxable portion of any IRA distribution.

Homeowners can qualify for only one Enhanced STAR program, not both.

The post Tax Savings Through the STAR Credit Program is Currently Higher Than the STAR Exemption appeared first on Town of Perinton.

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