In December, NYSASBO will be opening up a survey regarding the new property tax rebate. This three-question survey will inquire as to your knowledge of the rebate, how you think it will impact your district, and whether your district is likely to seek a tax cap override or not in 2016.
Our last blog post referenced a new property tax rebate, established in the 2015 Enacted State Budget. We received some feedback on the post and we will be pursuing further research so that we can provide you with as much information about this issue as possible.
The property tax rebate is separate from the more well-known property tax freeze credit that provided credits to eligible taxpayers in 2014 and 2015. The property tax rebate was established in the 2015 budget. It would apply to the years 2016 through 2019. It is a tax rebate for taxpayers receiving a STAR exemption. In order to be eligible for the rebate, taxpayers must meet income and residency requirements of the STAR program and be living in a district that complied with the tax cap.
In 2016, taxpayers living within a Metropolitan Commuter Transportation District (MCTD) who make $275,000 or less would receive a $130 rebate. Those living outside the MCTD would receive a $185 rebate. After 2016, the rebate amount would equal the product of STAR tax savings multiplied by a percentage that depends on the taxpayer’s income. Adjusted gross income from two years prior is used to determine taxpayers’ income.
Below is NYS Tax Law 606 n-1, where the property tax rebate is described. If you have any questions regarding this rebate, please post them in the comments, or send an email to kshannon@nysasbo.org.
(n-1) Property tax relief credit. (1) An individual taxpayer who meets
the eligibility standards in paragraph two of this subsection shall be
allowed a credit against the taxes imposed by this article in the amount
specified in paragraph three of this subsection for tax years two
thousand sixteen, two thousand seventeen, two thousand eighteen, and two
thousand nineteen.
(2) (a) To be eligible for the credit, the taxpayer (or taxpayers
filing joint returns) on the personal income tax return filed for the
taxable year two years prior, must have (i) been a resident, (ii) owned
and primarily resided in real property receiving the STAR exemption
authorized by section four hundred twenty-five of the real property tax
law, and (iii) had qualified gross income no greater than two hundred
seventy-five thousand dollars. Provided, however, that no credit shall
be allowed if any of the following apply:
(i) Such property is located in an independent school district that is
subject to the provisions of section two thousand twenty-three-a of the
education law and that has adopted a budget in excess of the tax levy
limit prescribed by that section. To render its taxpayers eligible for
the credit authorized by this subsection, the school district must
certify its compliance with such tax levy limit in the manner prescribed
by subdivision two of section two thousand twenty-three-b of the
education law.
(ii) Such property is located in a city with a dependent school
district that is subject to the provisions of section three-c of the
general municipal law and that has adopted a budget in excess of the tax
levy limit prescribed by that section. To render its taxpayers eligible
for the credit authorized by this subsection, the city must certify its
compliance with such tax levy limit in the manner prescribed by
subdivision two of section three-d of the general municipal law.
(iii) Such property is located in the city of New York.
(3) Amount of credit. (a) For the two thousand sixteen taxable year
(i) for a taxpayer residing in real property located within the
metropolitan commuter transportation district (MCTD) and outside the
city of New York, the amount of the credit shall be $130; (ii) for a
taxpayer residing in real property located outside the MCTD, the amount
of the credit shall be $185.
(b) For the two thousand seventeen, two thousand eighteen and two
thousand nineteen taxable years (i) For a taxpayer who owned and
primarily resided in real property receiving the basic STAR exemption,
the amount of the credit shall equal the STAR tax savings associated
with such basic STAR exemption, multiplied by the following percentage:
(A) for the two thousand seventeen taxable year:
Qualified Gross Income Percentage
Not over $75,000 28%
Over $75,000 but not over $150,000 20.5%
Over $150,000 but not over $200,000 13%
Over $200,000 but not over $275,000 5.5%
Over $275,000 No credit
(B) for the two thousand eighteen taxable year:
Qualified Gross Income Percentage
Not over $75,000 60%
Over $75,000 but not over $150,000 42.5%
Over $150,000 but not over $200,000 25%
Over $200,000 but not over $275,000 7.5%
Over $275,000 No credit
(C) for the two thousand nineteen taxable year:
Qualified Gross Income Percentage
Not over $75,000 85%
Over $75,000 but not over $150,000 60%
Over $150,000 but not over $200,000 35%
Over $200,000 but not over $275,000 10%
Over $275,000 No credit
(c) For a taxpayer who owned and primarily resided in real property
receiving the enhanced STAR exemption, the amount of the credit shall
equal the STAR tax savings associated with such enhanced STAR exemption,
multiplied by the following percentage:
Taxable Year Percentage
two thousand seventeen 12%
two thousand eighteen 26%
two thousand nineteen 34%
(d) In no case may the amount of the credit allowed under this
subsection exceed the school district taxes due with respect to the
residence for that school year.
(4) For purposes of this subsection:
(a) "Qualified gross income" means the adjusted gross income of the
qualified taxpayer for the taxable year as reported for federal income
tax purposes, or which would be reported as adjusted gross income if a
federal income tax return were required to be filed. In computing
qualified gross income, the net amount of loss reported on Federal
Schedule C, D, E, or F shall not exceed three thousand dollars per
schedule. In addition, the net amount of any other separate category of
loss shall not exceed three thousand dollars. The aggregate amount of
all losses included in computing qualified gross income shall not exceed
fifteen thousand dollars.
(b) "STAR tax savings" means the tax savings attributable to the basic
or enhanced STAR exemption, whichever is applicable, within a portion of
a school district, as determined by the commissioner pursuant to
subdivision two of section thirteen hundred six-a of the real property
tax law.
(c) "Metropolitan commuter transportation district" or "MCTD" means
the metropolitan commuter transportation district as defined in section
twelve hundred sixty-two of the public authorities law.
(5) If the amount of the credit allowed under this subsection shall
exceed the taxpayer's tax for the taxable year, the excess shall be
treated as an overpayment of tax to be credited or refunded in
accordance with the provisions of section six hundred eighty-six of this
article, provided, however, that no interest shall be paid thereon. For
each year this credit is allowed, on or before October fifteenth of such
year, or as soon thereafter as is practicable, the commissioner shall
determine the taxpayer's eligibility for this credit utilizing the
information available to the commissioner on the taxpayer's personal
income tax return filed for the taxable year two years prior to the
taxable year in which the credit is allowed. For those taxpayers whom
the commissioner has determined eligible for this credit, the
commissioner shall advance a payment in the amount specified in
paragraph three of this subsection, which payment shall be issued, to
the greatest extent practicable, by October thirty-first of each year
the credit is allowed. A taxpayer who has failed to receive an advance
payment that he or she believes was due to him or her, or who has
received an advance payment that he or she believes is less than the
amount that was due to him or her, may request payment of the claimed
deficiency in a manner prescribed by the commissioner.
(6) A taxpayer shall not be eligible for the credit allowed under this
subsection if the school district taxes levied upon the residence during
the taxable year remain unpaid sixty days after the last date on which
they could have been paid without interest, or in the case of a school
district where such taxes are payable in installments, if such taxes
remain unpaid sixty days after the last date on which the final
installment could have been paid without interest. If the taxes remain
unpaid on such sixtieth day, the amount of credit claimed by the
taxpayer under this subsection or the amount of advance payment of
credit received by the taxpayer pursuant to paragraph five of this
subsection shall be added back as tax on the income tax return for the
taxable year in which such sixtieth day occurs.
(7) Only one credit per residence shall be allowed per taxable year
under this subsection. When two or more members of a residence are able
to meet the qualifications for a qualified taxpayer, the credit shall be
equally divided between or among such individuals. In the case of
spouses who file a joint federal return but who are required to
determine their New York taxes separately, the credit allowed pursuant
to this subsection may be applied against the tax of either or divided
between them as they may elect.