Yesterday, the New York State Department of Taxation and Finance (DTF) unveiled an online School Tax Relief (STAR) Exemption Registration platform for homeowners currently receiving the Basic STAR property tax exemption.

For 2014 and beyond, DTF will oversee Basic STAR property tax exemptions, which require a homeowner’s property to be the primary residence. DTF will have ready access to this information from taxpayers claiming their primary residence is somewhere in New York State. DTF will be able to monitor the exemption to ensure that taxpayers are only claiming one primary residence, and will also be able to determine whether nonresidents of NYS are obtaining the exemption.

A taxpayer who receives the benefit of the STAR exemption but files a non-resident NYS income tax return could trigger a residency audit. Claiming the STAR exemption is an indication that the taxpayer may be a resident of NYS. While NYS residents pay NYS income tax on all income, nonresidents pay NYS income tax on income sourced in the State. Read this for more background information on residency issues in New York State.

What is the Basic STAR Exemption?

Homeowners eligible for the Basic STAR exemption may be entitled to a credit against a school property tax bill. The average annual homeowner benefit from Basic STAR is $700.

The general requirement is the residence must be the owner’s primary residence, and the combined annual income of the resident owner and owner’s spouse must be $500,000 or less. Married couples with multiple residences are eligible to receive only one Basic STAR Exemption.

How does the new platform impact eligible homeowners?

To receive the Basic STAR exemption for 2014 and subsequent years, eligible homeowners must register for the Basic STAR exemption no later than December 31, 2013. Registering online is one option. One can also register by calling (518) 457-2036.

This registration requirement *does* apply to homeowners who currently receive the Basic STAR exemption. Homeowners will not need to re-register every year, however, to receive the exemption.

Why require the registration?

Fairness and money. Until now, local assessors have evaluated whether an individual is eligible for the STAR exemption. These assessors cannot necessarily determine whether an individual is obtaining more than one STAR exemption, which is prohibited. Apparently, the NYS Department of Taxation and Finance discovered that many taxpayers were receiving more than one exemption.

I heard that some homeowners have to wait to register. Why?

Suffolk County homeowners may have to wait until the end of September before they can register, as reported by Riverhead Local. A Tax Department spokesman indicated that the property tax data for Suffolk County won’t be available until then.

For more information about the new STAR exemption registration program, check out this video from the NYS Department of Taxation and Finance:

Submitted by Brad Polizzano on Wed, 08/21/2013