Basic STAR Income Verification—2013 program overview
Taxpayers who earn more than $500,000 are not eligible for the Basic STAR property tax exemption.
For the 2013-14 school year, the Tax Department matched Basic STAR recipients from the 2012 assessment roll against income tax data from the 2011 tax year. We're using the Assessment Community Secure Web site to provide assessors with a list of the Basic STAR recipients who earn more than $500,000.
Definition of income
For 2013, income is based on the 2011 tax year, and is the combined income of:
- all owners who reside at the property, and
- any owner's spouse who resides at the property.
Income is defined as federal "adjusted gross income" minus the "taxable amount" of total distributions from individual retirement accounts or individual retirement annuities (both of which are commonly known as "IRA's"). For specific line references on 2011 federal or state income tax returns, see page 2 of the STAR application.
(Bear in mind that, for Enhanced STAR, income eligibility is different than for Basic STAR. For Enhanced STAR, it is the combined incomes of all owners and any owner's spouse who resides at the property.)
For those property owners who we determined are no longer eligible for Basic STAR, the assessor will:
- Notify the property owner that the exemption is being removed
- Remove the STAR exemption from the assessment roll used to levy 2013-14 school taxes
- Review cases where the property owner disagrees with our determination
- Keep a record of any appeals where they determine the property owner is eligible
In addition, it continues to be the responsibility of the assessor to ensure that the property owners satisfy the STAR residency and ownership requirements.
Notifying ineligible property owners
Assessors will use the RP-425-ID Denial of STAR exemption due to income threshold to notify taxpayers who are no longer eligible for Basic STAR. So that assessors can do mail merges and modify the form to meet local needs, a Word version of the form was provided via e-mail.
Assessors should include the date for the taxpayer to respond directly if he or she disagrees with the removal of the exemption. The response date can be as late as the tentative roll date. (Under the Enhanced STAR IVP program, property owners have 45 days to respond [RPTL 425-12-a].)
Appealing the removal
Taxpayers who disagree with the removal of the STAR exemption should provide their state or federal tax returns to the assessor or the board of assessment review (BAR).
If the assessor determines that the property owner is eligible, he or she should keep a record of the determination for future review. In addition, the assessor should keep a copy of any income tax returns that are provided by the taxpayer for purposes of determining income-eligibility. To protect property owners' confidentiality, assessors can strike out the social security numbers.
If the property owner presents a state tax return for a state other than New York, the assessor can grant the exemption as long as he or she is satisfied that the parcel is the property owner's primary residence and all other eligibility criteria are met.
If the property owner does not present the income tax return to the assessor until after school taxes have been levied, and the assessor determines that the property owner was eligible, the assessor should proceed as follows:
- If school taxes have not yet been paid, the assessor should give the property owner Form RP-554 (Application for Corrected Tax Roll) to submit to the County Director, along with a written statement confirming that the assessor has verified that the property owner meets the eligibility requirements for the Basic STAR exemption for the school year in question. Upon receiving that information, the County Director may recommend to the tax levying body (or designated official, if applicable) that the school tax bill should be reduced on the basis of Tax Law § 171-u.
- If school taxes have been paid, the assessor should give the property owner Form RP-556 (Application for Refund and Credit of Taxes) to submit to the County Director, along with a written statement confirming that the assessor has verified that the property owner meets the eligibility requirements for the Basic STAR exemption for the school year in question. Upon receiving that information, the County Director may recommend to the tax levying body (or designated official, if applicable) that a school tax refund or credit should be provided to the property owner on the basis of Tax Law § 171-u.
New Basic STAR Applicants
Assessors are not required to request income information from new Basic STAR applicants. By signing the RP-425 application, they are certifying that their income is under $500,000. For the following year, the Tax Department will determine whether they are income-qualified. The department also reserves the right to check their incomes for this year.
Ownership for STAR purposes is as of Taxable Status Date.
Assessors should only send Form RP-425-ID to property owners who would have otherwise qualified for STAR this year.
If a home with Basic STAR sells after taxable status date, the assessor should maintain the exemption for the current year, unless the department determines that the property is ineligible.
FOIL and Basic STAR Income-Related Data
Information about a person's income provided to the assessor by the Tax Department or by a taxpayer in the course of administering STAR is confidential and may not be disclosed except as authorized by law. FOIL does not mandate the release of such data; on the contrary, it clearly allows such data to be withheld on the grounds that its disclosure would constitute an "unwarranted invasion of personal privacy" (RPTL § 425(4)(b)(iii), (v)(A)). The same would be true for income-related data given by a property owner to the BAR in connection with a petition to review a STAR denial (Public Officers Law § 87(2)(b)). In addition, we remind you of the need to take steps to ensure the security of any tax returns that you store electronically or otherwise.
Requesting a copy of an income tax return
Taxpayers who don't have a copy of their income tax returns can request a copy using Form DTF-505.
For more information
General STAR administration information is available from the STAR Assessors' Guide.
Instructions for the Basic STAR Income Limit report are available in the Assessment Community Secure Website.