Property Tax Relief Credit

 KEEPING YOU INFORMED…

The “Property Tax Relief Credit” is a tax credit available to eligible taxpayers for the 2016 through 2019 tax years. N.Y. Tax Law § 606(n-1). This memorandum outlines the amount of the credit as well as the eligibility requirements.

Requirements for the Credit

To be eligible for the credit, the taxpayer (or taxpayers filing joint returns), based on tax return filings from two years prior, must have: (1) been a New York State resident; (2) owned and primarily resided in real property located in New York State, other than in New York City, receiving the STAR exemption; and (3) had an adjusted gross income no greater than $275,000. A taxpayer is ineligible for the tax credit if the real property is located in a school district that adopted a budget during the calendar year in excess of the tax levy limit. For example, if the school district in which the property is located adopts a budget in 2016 that is in excess of its tax levy limit, then the taxpayer(s) would be ineligible for the tax credit for the tax year 2016.

Amount of the Credit

For the 2016 calendar year, the tax credit is $185 if the real property is located outside of the metropolitan commuter transportation district (MCTD)[1] or $130 if located in the MCTD and outside the city of New York.[2] For the 2017, 2018 and 2019 calendar years, the tax credit is the product of the basic STAR savings multiplied by a percentage depending on the taxpayer’s income (see chart below).

Adjusted Gross Income201720182019
Up to $75,00028%60%85%
$75,001-$150,00020.5%42.50%60%
$150,001-$200,00013%25%35%
$200,001-$275,0005.5%7.5%10%
Over $275,000No CreditNo CreditNo Credit

For a taxpayer who owned and primarily resided in real property receiving the enhanced STAR exemption, the credit amount is the product of the enhanced STAR exemption tax savings multiplied by the applicable percentage set forth below:

Taxable Year

Percentage

2017

12%

2018

26%

2019

34%

Ramifications for School Districts

Boards of Education, Superintendents, and Business Officials need to consider the availability of the Property Tax Relief Credit when determining whether to attempt to pierce the tax levy limit. Any adopted budget that exceeds the tax levy limit will render the affected taxpayers ineligible for the Property Tax Relief Credit for that calendar year.

Please contact us if you have any questions regarding the Property Tax Relief Credit.

THIS MEMORANDUM IS MEANT TO ASSIST IN GENERAL UNDERSTANDING OF THE CURRENT LAW. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. THOSE WITH PARTICULAR QUESTIONS SHOULD SEEK THE ADVICE OF COUNSEL.

© Lamb & Barnosky, LLP 2016

[1] The MCTD includes the counties of New York (Manhattan), Bronx, Kings (Brooklyn), Queens, Richmond (Staten Island), Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess and Westchester.

[2] The credit will be paid by check issued to the taxpayer on or about October 31.