Property taxes in NY, especially the school part, can be a lot. But what if there was a program just for helping owners get some relief? That’s exactly what NY’s School Tax Relief (STAR) program is. It’s not a secret or a rule to follow.
It’s a real benefit to put tax money back in the pocket of owners and owners-occupants who live here in the Empire State. If you’re new to this or have heard about it but don’t really know how it works, don’t worry.
What Is STAR tax program exactly? It’s Relief in two ways
The STAR program gives financial help in two ways. Think of it as getting a discount on your bill versus getting money back after you pay your bill. The STAR Exemption: The classic. If you get the exemption, your school tax bill comes with a discount. The savings are figured before you even see the bill. It’s simple. The STAR Credit: The new way for most owners.
Instead of lowering your bill, the state figures the amount of your benefit and sends you a check or direct deposit. You then use that money to pay your full tax bill. The benefit of the credit is that it will increase a little each year to keep up with inflation, which the exemption will not do.
For the school year that begins in 2025 and ends in 2026 (which will be based on your 2023 tax return data), the program gives back about $2.2 billion to nearly 3 million owners across the state, for the upcoming school year. That’s a lot of families who are in less pain.
Who gets to benefit? STAR tax relief eligibility
There are rules and they are strict but not hard. For Basic STAR: You need to own your home, and it needs to be your main home. You cannot get STAR for a holiday home or a home you rent to someone else. The total income of everyone who owns the house and his or her spouse must be $500,000 or less.
They figure this by looking at the information in your 2023 federal or state return, with some tweaks, like IRA distributions. For Enhanced STAR (for older people): They give you an extra amount of relief. To get this, you need to have at least one of the owners or a spouse who is 65 by December 31, 2024.
It also needs to be a main home and the total income of everyone in the house is limited to $107,300 or less. Now, how much can you save? This is the golden question (well, hopefully hundreds of dollars). The amount you save isn’t the same for everyone. It depends on the local school tax rate and what your home is worth.
Some to get up to $600 in tax relief
In general, most owners getting the exemption will see a savings of around $350 to $600 a year. Elder owners getting the enhanced STAR will see a bigger benefit, and most often save between $700 and $1500. In high-tax areas, this can be even higher. The basic STAR benefit protects the first $86,100 of your home’s full value from school taxes. The enhanced STAR benefit goes a lot further.
If you want to see what you might see based on your area, the NY Tax Department site has a great STAR tax exemptions and credits estimation tool. Okay, I want it! How do I get it? This is an important step. You need to do something in order to get it.
If you’re a new owner or have never applied before…
In this case, you need to sign up for the STAR Credit with the state. You do it online at the New York State Homeowner Benefit Portal (tax.ny.gov/star). You need to have your 2023 return ready because you will need to reference it.
When you sign up for the credit, sign up to have it direct deposited. It’s much quicker and more secure than waiting for a paper check in the mail. Mark your calendar! The deadline to get the full benefit is June 30, 2025. You can sign up after that, but you may only get a partial benefit.
If you have received the exemption for years (most owners signed up before 2015) you are usually set and do not need to sign up. However, it’s worth considering changing to the credit so that you get the yearly increase.
When will the money arrive?
If you are getting the exemption, you will see the savings on your school tax bill when it arrives. For the credit, timing is everything. The state sends the checks and deposits after your local school tax bills are due. This means there is a wide range depending on the location.
For towns with August or September due dates, the payments are typically from the middle of summer through the fall. For other areas, where the due date is late in the year (like some areas in Suffolk County), you may not see the credit until December.
