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New STAR exemption rule on the way

New state legislation that goes into effect this year will require that taxpayers who earn more than $500,000 will no longer receive the Basic STAR property tax exemption.

New York State’s School Tax Relief (STAR) Program provides property tax exemptions (also know as homestead exemptions) for New York homeowners. Basic STAR is available to anyone who owns and lives in his or her own home and earns less than $500,000. Enhanced STAR is available for senior homeowners whose incomes do not exceed $79,050.

“While it’s not a huge concern for most people right now, changing the legislation is a slippery slope," says Cori Kaplan, president of All Island Tax Grievance in Huntington. "Albany is trying to close loopholes, and I’m concerned that the income levels will be lowered even further, affecting more and more people.”

For 2011, income for Basic STAR purposes is based on the 2009 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.

To confirm your eligibility, your assessor may ask you to provide information about your income:

-If you agree that you’re ineligible, you don’t need to do anything. However, if your income drops below the limit in the future, you’ll need to re-apply for the exemption.

-If your household income is below $500,000 and you believe that you’re eligible for the exemption, contact your assessor. The assessor may advise you to file a formal assessment grievance.

If you receive a notice from your assessor requesting more information:

-Provide the assessor with your 2009 federal and state income tax returns. If you don’t file a tax return, you’ll need to provide the assessor with all of your 2009 income statements (1099, W-2 forms, etc.).

If you don’t receive a notice from your assessor there’s no need to do anything — you’ll continue to receive the Basic STAR exemption. To learn more, contact your assessor’s office, or go to the New York State Office of Real Property website here and click the Municipal Profiles link.

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