New York Senior Tax Credits: How to Get Them and Why It's Harder Than It Looks

Elderly people disclose their financial affairs to municipalities across New York State in a desperate attempt to prove that their incomes are low enough to qualify for a tax credit of up to 50%. For many, the papers in their folders are not good enough. Assessors send people home, sometimes two or three times, to dig up the correct year's tax return or IRA reports, or a long list of other documents. Syracuse.

On Wednesday, February 23, one woman even held up a stack of prescription drug receipts in the hallway of Clay City Hall. Unreimbursed medical expenses may be used to reduce your income. This will help you qualify for higher property tax credits.

However, after about 20 minutes of looking at the records, the woman was denied because her tax return said she had IRA income that she said she did not.

New York State has long been criticized for creating property tax relief programs that bring more grief than relief. But the tax exemption is especially frustrating for low-income seniors, assessors say.

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Most people don't even know it exists. Almost no one understands how to get it, how often to apply, or that it's not an Enhanced STAR.

The exemption comes with a list of 14 different proof of identity and proof of income. Income limits vary from municipality to municipality, and some cities provide benefits on a sliding scale while others do not.

Who has the right

The savings could be over $1000 for modest-sized homes in a state with some of the highest property taxes in the country. About 160 people have the exemption, according to the state tax department.

The Clay Woman and others are rushing to meet the March 1 deadline to claim a property tax break meant for people who make less than $37 a year.

Every person who came to the counter began with a phrase like “I don’t know if I have the right documents.”

Enhanced STAR is a government tax relief program for people over 65 years of age. Homeowners apply only once.

Enhanced STAR also requires only one document - a tax return. This program is administered by the state tax department, which can review changes in income on tax returns annually.

An exemption for the elderly is handled by city assessors. They don't have that information. Instead, to qualify for a senior citizen exemption, homeowners must queue each year and prove to an appraiser that their income is low enough to qualify. It applies to school taxes, as well as county, city, town, and village property taxes.

The difference between the two programs

The difference between the two programs goes back a long way in the history of New York's elaborate attempt to cut taxes without actually cutting taxes.

New York State counts only taxable income for Enhanced STAR benefits. This program has higher income limits, $92 this year. Expenses are absorbed by the power of the entire state budget.

For the senior tax exemption, the state allows every municipality in upstate New York to set a maximum income cap ranging from $3000 to $29 for a 000 percent property tax rebate. Municipalities also have the option of lowering the interest rate for people earning between $50 and $29.

The local retirement age exemption counts both taxable and non-taxable income towards benefits.

The goal is to ensure that someone with significant tax-sheltered investment income does not receive tax credits by demonstrating a sufficiently small taxable income. The senior discount is being absorbed by other residents of the city, so the city has an added incentive to ensure that assistance goes only to those who really need it.

New York State Appraisers Association Knows Nothing

To further confuse residents this year, New York Gov. Kathy Hokul signed an executive order allowing cities to decide whether they want to let homeowners skip this year's exemption application and simply extend last year's allowance to avoid visiting municipalities during quarantine.

Former New York Gov. Andrew Cuomo issued a similar executive order in 2021, but gave cities no choice.

There is no single place to find out which cities have decided to drop renewal applications. The state doesn't follow it. According to chief executive Warren Wheeler, the New York State Appraisers Association knows nothing.

The only way to find out is to call the city's tax expert. In Onondaga County, the Manlius City Council passed a local law to deny the application this year. Clay didn't do that.

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Clay's appraiser Rob Beek said about two-thirds of the people who qualify had already applied when Hokul issued the order in December.

Beak was one of two staff members who helped people in line file applications for the senior tax exemption on Feb. 23, as well as what he calls the "candy store" of other exemptions, all due by the end of the day. on Tuesday.

New York also allows reduced contributions for veterans, people with disabilities, agricultural land owners, and clergy. Each program has different applications and qualifications.

In October, the city starts notifying people that they need to apply by March 1st. They call retirees who haven't applied by February. But every year, queues begin to form a few days before the deadline.

Only 3 people work in the office, processing data from 19 sites

“You would be surprised how many people don’t know what their exemption is,” he said. “So many seniors don’t have families in the area to help them, so we do our best to help them through the process.” ".

Sometimes they have to call their children or financial advisers for clarification.

Around 1600 people have old-age or disability benefits, Bick said, but they have the same strict rules for applying.

Bridget Gallagher, a Saratoga Springs teacher, traveled to Clay this week during the school holidays to help her 79-year-old mother review her notes. Her mother was sent home twice for more information and was upset.

Gallagher watched as a clerk flipped through personal papers to make sure her mother didn't make more than $37 a year. Her father is dead. Her mother has enough income to pay her electricity, telephone and car bills. Gallagher said she made a little scene.

“These are the oldest residents of our city,” she said. “These are the benefits they deserve.”

New York has more property tax relief than any other state.

This exemption entitles Gallagher's mother to a 50 percent discount on her home's $133 valuation. According to her tax bill, that means saving about $500 in taxes. With the addition of Enhanced STAR benefits, she pays only $1600 in taxes instead of about $14, according to the documents.

In the end, Gallagher's mother was released. The stress of it also brought her to the doctor's office.

According to Wheeler, the most obvious solution to this confusion is to get rid of the exception. But no one is advocating the removal of tax breaks that would keep older people in their own homes.

Another solution, Beek says, is for the state to take on tax breaks that require proof of income. According to him, this relieves cities of the need to launch a program of social services.

“New York has more property tax relief than any other state because the state is moving away from fine-tuning the property tax process and instead continues to patch up the process by adding relief and, more recently, rebates,” said Bick: You can't do the same thing over and over and expect different results.

Here's what you need to know

New York has all sorts of programs that reduce the taxable value of property for people who live in their homes. There are two important programs for the elderly. Here's what you need to know to get Enhanced STAR and release for older people with low income.

Low Income Retirement Exemption:

Submit an application to the city credit chamber annually before the end of the working day on March 1.

To receive it is necessary:

• be over the age of 65;
• have your own home as your primary residence;
• have a low income
• apply every year.

The amounts vary by county, city, village, and school district, and go as high as $37 in upstate New York. Call the appraiser's office for information about income limits.

You also need to submit these forms to the municipality:

• 2020 federal income tax return;
• proof of residence (driver's license or government-issued ID);
• a copy of the trust management agreement, if the property is in trust management.

Any of the following applies even if you are filing a tax return:

• all 1099 for Social Security retirement benefits;
• all year-end IRA returns showing interest, dividends, and realized capital gains as of 31.12.20/XNUMX/XNUMX;
• W-2 for wages;
• net income from agriculture, rent, business or professional activity;
• income from real estate or trust;
• profit from sales and exchanges;
• proof of income from any other source, including unemployment insurance, veterans' disability, workers' compensation, child support, and gambling winnings;
• proof of unreimbursed medical expenses (they can be used to reduce your income in some cities).

Enhanced STAR:

To receive it is necessary:

• be over the age of 65;
• have your own home as your primary residence;
• have an income of no more than $92 in the 000-2022 tax year;
• if you have a Basic STAR and want to apply for exemption at EnhancedSTAR, apply once at your local appraiser's office by close of business on March 1;
• if you are a new homeowner or do not yet have a basic STAR, you must register with the state tax office on the page tax.ny.gov/star.

The state is gradually transferring all homeowners to its system. It works like an income tax credit instead of a property tax exemption.

You will need to show copies of your 2020 state and federal tax returns.

The telephone number for STAR inquiries at the State Revenue Office is 518-457-2036.

What to do if you are refused?

If you have been denied a release and think you should get one, you can file a claim with an independent body in your city at Complaint Day. In most cities, Complaint Day hearings are held on the fourth Tuesday in May. Call the appraiser's office for a date.