Tax Credit Programs - Tax Credits for Homeowners or Renters

Summary

SENIOR CITIZEN HOMEOWNERS’ EXEMPTION

The Senior Citizen Homeowners’ Exemption (SCHE) is a New York State tax credit program that provides a property tax exemption of up to 50% of the amount of property taxes to senior homeowners age 65 and over. The maximum amount of annual income cannot be more than $58,399.

DISABLED HOMEOWNERS’ EXEMPTION

The Disabled Homeowners’ Exemption (DHE) is a New York State tax credit program that provides a property tax exemption of up to 50% of the amount of property taxes for homeowners with disabilities. The maximum amount of annual income cannot be more than $58,399.

SCHOOL TAX RELIEF PROGRAM

The New York State School Tax Relief Program (STAR) provides New York State homeowners with partial exemptions from school property taxes. There are two levels of benefits: Basic STAR and the Enhanced STAR.

REAL PROPERTY TAX CREDIT

The Real Property Tax Credit is a benefit for New York State income tax filers who own or rent property and have a household gross income of $18,000 or less and pay either real property taxes or rent their residence(s). To apply for the credit, taxpayers must fill out NYS tax form IT 214, Claim for the Real Property Tax Credit, and attach it to his/her NYS income tax return.

The Enhanced Real Property Tax for NYC Residents

The Enhanced Real Property Tax Credit is available to NYC residents who have a household gross income of less than $200,000 and pay either real property taxes or rent for their residences. The credit can be as much as $500. To apply for the credit, taxpayers must fill out NYC-208 and attach it to his/her NYS income tax return.

Senior Citizens Homeowners’ Exemption (SCHE)

DESCRIPTION OF THE SENIOR CITIZEN HOMEOWNERS’ EXEMPTION

The Senior Citizen Homeowners’ Exemption (SCHE) provides a property tax exemption for homeowners age 65 and over by reducing the property’s assessed value and thus lowering the amount of property taxes. The amount of the reduction is based on the combined federal income tax returns for all owners on the deed. The table below provides an estimate of how much the assessed value of the property will be reduced.

If the Owners’ Income Is Between	Reduce The Assessed Value By)
$57,500 and $58,399	5%
$56,600 and $57,499	10%
$55,700 and $56,599	15%
$54,800 and $55,699	20%
$53,900 and $54,799	25%
$53,000 and $53,899	30%
$52,000 and $52,999	35%
$51,000 and $51,999	40%
$50,001 and $50,999	45%
$0 and $50,000	50%

Any exemption granted to a qualified person, who is a tenant-stockholder of a cooperative apartment, will be credited by the taxing authority against the assessed value of the property. The reduction in property taxes resulting from the exemption will be credited by the cooperative apartment corporation against the amount of such taxes chargeable to the tenant-stockholder.

QUALIFYING FOR THE SENIOR CITIZEN HOMEOWNERS’ EXEMPTION

Age

Each of the owners of the property must be 65 years of age or older by December 31st of the current tax year. If there is more than one owner, all owners must be 65 and over, except when the property is owned by husband and wife or siblings. In these cases, only one needs to be 65 or over.

Where an exemption had been in effect on property owned by a married couple, a surviving widow or widower must have been 62 years of age or over when the spouse died in order to retain eligibility. Similarly, where the exemption was granted to a married couple and the eligible spouse leaves the property due to divorce, legal separation or abandonment, the exemption is retained if the remaining spouse is at least 62 years of age.

Property Ownership

The property must be the primary residence of the owner, whether a house, condominium or cooperative apartment.

The home must have been owned by one of the owners for a minimum of 12 consecutive months prior to the application for the exemption.

The property must be used exclusively for residential purposes. If a portion of the property is used for other than residential purposes, the exemption will apply only to the portion that is used exclusively for residential purposes.

Kevin turned 65 in November of 2020. He bought his home in June 2020. He files for SCHE in March 2021. Since he had not resided in is home for the 12 months prior to March 15, 2021, he is not eligible for the exemption for the 2020 tax year. However, he will be eligible for the exemption in 2021, if he remains in his home.

Residency

The property must be the primary residence of, and must be occupied by, all eligible owners of the property unless an owner is absent from the property because s/he:

Has Divorced, or
Experienced a legal separation or abandonment, or
Is receiving health-related services as an inpatient of a residential health care facility (a residential health care facility is a nursing home or other facility that provides lodging, board, and physical care including, but not limited to, the recording of health information, dietary supervision, and supervised hygienic services).

Individuals who own more than one property during the tax year can only use his/her legal residence to receive the exemption.

Citizenship/Immigration Requirements

Applicants must be U.S. citizens or immigrants who are legally residing residents. Immigrants must have either a Social Security Number or an Individual Taxpayer Identification Number (ITIN) to file a tax return.

Assets/Resources

There are no assets/resource requirements.

Income

The maximum amount of annual income is no more than $58,399. Total household income is the applicant’s Federal Adjusted Gross Income less the taxable amount of IRA distributions. For countable and non-countable income, go to https://www1.nyc.gov/site/finance/benefits/landlords-dhe.page.

Income includes the combined income of all property owners. If married, the income of both spouses (even if one spouse is not a qualified homeowner) must be included in the total unless one spouse is absent from the residence due to a legal separation or abandonment. The income of a non-resident spouse, who retains an ownership interest after the divorce, is not included.

Income is based on the latest preceding “income tax year” prior to the date of application. This usually is the preceding calendar year.

If an owner is residing in a nursing home, his/her income will not be counted, unless his/her income exceeds the amount paid by the owner, his/her spouse or a co-owner for care to the nursing home. Proof from the facility of the amount paid for an owner’s care must be submitted with the application.

CLAIMING THE SENIOR CITIZEN HOMEOWNERS’ EXEMPTION

Filing for the First Time

For those not currently receiving the Senior Citizen Homeowners’ Exemption, an online application may be submitted.

SCHE Online Application: https://a836-pts-efile.nyc.gov/SmartFile/Filing/FilingType/Info/NYC_SCHE
SCHE Online Application for Co-ops: https://a836-pts-efile.nyc.gov/SmartFile/Filing/FilingType/Info/NYC_SCHE_COOP

A paper application is available at https://www1.nyc.gov/site/finance/benefits/landlords-sche.page.

The filing date in NYC is March 15th, however applicants would need to be 65 by December 31st of that same year.

See below, Additional Resources,) for free tax preparation information.

Renewing the Benefit

The SCHE benefit must be renewed annually. The Department of Finance should send a renewal application when it is time to renew the benefit. NYC Renewals must be submitted by the 15th of the calendar year following the tax filing year, or the property taxes could increase significantly. Property owners also have the option to complete an renewal online at https://a836-pts-efile.nyc.gov/SmartFile/Filing/FilingType/Info/NYC_SCHE_RNW or go to https://www1.nyc.gov/site/finance/benefits/landlords-sche.page for a paper renewal application.

Disabled Homeowners Exemption (DHE)

DESCRIPTION OF THE DISABLED HOMEOWNERS’ EXEMPTION

The Disabled Homeowners’ Exemption (DHE) provides a property tax exemption for homeowners with disabilities by reducing the property’s assessed value and thus lowering the amount of property taxes. The amount of the reduction is based on the combined federal income tax returns for all owners on the deed. The table below provides an estimate of how much the assessed value of the property will be reduced.

If the Owners’ Income Is Between	Reduce The Assessed Value By)
$57,500 and $58,399	5%
$56,600 and $57,499	10%
$55,700 and $56,599	15%
$54,800 and $55,699	20%
$53,900 and $54,799	25%
$53,000 and $53,899	30%
$52,000 and $52,999	35%
$51,000 and $51,999	40%
$50,001 and $50,999	45%
$0 and $50,000	50%

QUALIFYING FOR THE DISABLED HOMEOWNERS’ EXEMPTION

Documented Disability

The owner must have a documented physical or mental disability, not due to the use of alcohol or illegal drugs, that substantially limits that person’s ability to engage in one or more major life activities, such as perform manual tasks, walking, seeing, hearing, speaking, breathing, learning, working.

Documentation can include items such as a disability award letter from the Social Security Administration, an award letter from the U.S. Railroad Retirement Board or U.S. Postal Service, a certificate from the New York State Commission for the Blind, or a Veterans Administration letter stating that you are entitled to a veterans disability pension. Go to https://www.tax.ny.gov/pit/property/exemption/disablreqmnt.htm for more information.

If there is more than one owner, all owners must have a documented disability, except when the property is owned by husband and wife or siblings. In these cases, only one needs to have a documented disability.

Property Ownership

The property must be the primary residence of the owner, whether it is a house, a condominium or a cooperative apartment.

Residency

The property must be the primary residence of, and must be occupied by, all eligible owners of the property unless an owner is absent from the property because s/he

Has Divorced, or
Experienced a legal separation or abandonment, or
Is receiving health-related services as an inpatient of a residential health care facility (a residential health care facility is a nursing home or other facility that provides lodging, board, and physical care including, but not limited to, the recording of health information, dietary supervision, and supervised hygienic services).

Citizenship/Immigration Requirements

Assets/Resources

There are no assets/resource requirements.

Income

Income is based on the latest preceding “income tax year” prior to the date of application. This usually is the preceding calendar year.

CLAIMING THE DISABLED HOMEOWNERS’ EXEMPTION

All owners (each person on the deed or stock certificate) must complete the “Owner Information” section of the application. Information for all owners is required even if all the owners do not reside at the property. Individuals must indicate whether it is the primary residence of each owner and whether the owners are spouses or siblings.

Indicate on the application the names of owners not required to file and include the reason why and include supporting documentation.

Filing for the First Time

For those not currently receiving the Disabled Homeowners’ Exemption, an online application may be submitted.

DHE Exemption Online Application: https://a836-pts-efile.nyc.gov/SmartFile/Filing/FilingType/Info/NYC_DHE
DHE Exemption Online Application for Co-ops: https://a836-pts-efile.nyc.gov/SmartFile/Filing/FilingType/Info/NYC_DHE_COOP

A paper application is available at https://www1.nyc.gov/site/finance/benefits/landlords-dhe.page.

See below, Additional Resources, for free tax preparation information.

Renewing the Benefit

The DHE benefit must be renewed annually. The Department of Finance should send a renewal application when it is time to renew the benefit. Renewals must be submitted by the 15th of the calendar year following the tax filing year, or the property taxes could increase significantly. Property owners also have the option to complete an renewal online at https://a836-pts-efile.nyc.gov/SmartFile/Filing/FilingType/Info/NYC_DHE_RNW or go to https://www1.nyc.gov/site/finance/benefits/landlords-dhe.page for a paper renewal application.

School Tax Assessment Relief (STAR)

DESCRIPTION OF THE SCHOOL TAX RELIEF PROGRAM

New York State’s School Tax Assessment Relief (STAR) provides property tax relief to qualifying New York State homeowners. There are two parts to the STAR program – BASIC STAR and ENHANCED STAR – with different eligibility criteria for each. Most homeowners receive STAR as a credit, though some receive it as an exemption (see caution below on receiving STAR as an exemption).

STAR Credit Program

Under the STAR credit program, eligible homeowners whose income is $500,000 or less will receive a check in the mail.

STAR Exemption Program

Homeowners who receive their STAR benefit as an exemption receive a reduction on their school tax bill. Receiving the STAR benefit as an exemption may not be as beneficial as receiving it as a credit; individuals, may receive a greater benefit if they switch to the STAR credit to receive a check instead. While the value of the STAR credit may increase by as much as 2% each year, the value of the STAR exemption savings does not increase. For more information about switching, go to https://www.tax.ny.gov/pit/property/star/switch.htm.

The STAR exemption program is NOT available to new applicants. New homeowners, or those who were not receiving the STAR exemption on their current home in 2015, can register for the STAR credit program to receive a check. In addition, those receiving the exemption who want to switch to the STAR Credit Program can do so by visiting https://www.tax.ny.gov/pit/property/star/switch.htm for more information.

Homeowners who currently have a STAR exemption will need to reapply with the assessor if they are receiving the Basic STAR exemption and wish to apply for the Enhanced STAR exemption (typically when one turns 65), or if the homeowner continues to own the property but have filed a new deed.

Basic STAR/Enhanced STAR

There are two levels of STAR benefits: Basic STAR, available to anyone who owns and lives in their own home with earnings less than $500,000 and the Enhanced STAR, available to senior homeowners with incomes less than $90,550 for 2021, or less than $92,000 or less for 2022.

QUALIFYING FOR THE SCHOOL TAX RELIEF PROGRAM

Age Requirement

Basic STAR: There is no age requirement for Basic STAR.
Enhanced STAR: The age requirement for the Enhanced STAR is 65 or over as of December 31st of the year in which the exemption will begin.
For property owned by a spouse, or by siblings, only one of them must be at least 65 years old as of December 31st of the year in which the exemption will begin.
A surviving spouse can retain an existing Enhanced STAR exemption provided they are at least 62 years old as of December 31st of the year in which the exemption will continue. Otherwise, the individual may receive the Basic STAR exemption.

Eligible Property Owners

Applicants for both Basic and Enhanced STAR must own the property they use as their primary residence, including one, two, and three family homes, condominiums, cooperative apartments and manufactured homes, also known as mobile homes.

A primary home is usually the home where an individual lives for more than half the year. Individuals who own more than one property during the tax year can only use their primary residence to receive the STAR tax reduction.

Under STAR, individuals who reside in a mixed-used property can only claim the portion of the property used as a residence.

Residency

Applicants for both the Basic and Enhanced STAR must reside in New York State. Individuals must file for the exemption with their local assessor’s office within their municipality.

Assets/Resources

There are no assets/resource requirements.

Income

Basic STAR
Individuals must have a combined household income of $500,000 or less based on “adjusted gross income.” The adjusted gross income is the same as federal adjusted gross income, less distributions from individual retirement accounts and annuities and will include the income of:
- all owners who reside at the property, and
- any owner’s spouse who resides at the property.
  
  The income used for Basic STAR is based on the tax year two years prior to the current year. For example, eligibility for tax year 2021 is based on income information from the 2019 tax year.

The income limit for the STAR exemption is $250,000 or less. See above, Description, for an explanation of the STAR exemption.

Enhanced STAR

Individuals must have a combined household adjusted gross income of less than:
- $90,550 or less for the 2021-2022 school year,
- $92,000 or less for the 2022-2023 school year
  
  The adjusted gross income is the same as federal adjusted gross income, less distributions from individual retirement accounts and annuities.
  
  The income counted for the Enhanced STAR is based on the tax year two years prior to the current year. For example, eligibility for tax year 2021 is based on income information from the 2019 tax year.

CLAIMING THE SCHOOL TAX RELIEF PROGRAM

Basic STAR

Homeowners who have never received the exemption must register by phone or online with the New York State Tax Department in order to receive the exemption. To register by phone call (518) 457-2036 from 8:30 a.m. to 4:30 p.m., or online at https://www.tax.ny.gov/pit/property/star/default.htm.

Before beginning an online registration, gather all the information required, see https://www.tax.ny.gov/pit/property/star/default.htm#beforeregister. Users should complete the registration in one sitting as they will not have the ability to save their progress and log back in to complete at a later time.

Homeowners with an existing STAR do not need to register unless there has been a change in property ownership.

Enhanced STAR

Beginning for tax year 2019, first time applicants and those who renew their Enhanced STAR exemption, must enroll in the Income Verification Program.
Homeowners only need to enroll once and can receive the exemption each year if the homeowner continues to qualify.

In the first year, an assessor will verify eligibility based on the income information provided. For subsequent years, the Tax Department will automatically verify income eligibility; homeowners will not need to reapply for the exemption or provide copies of tax returns to the local assessor in future years.

Homeowners who are currently participating in IVP do not need to take any action to participate in the exemption program and will be contacted if further information is required.

For more information and links to the forms go to https://www.tax.ny.gov/pit/property/star/ivp.htm.

See below, Additional Resources, for free tax preparation information.

Filing Date

In NYC, the Department of Finance will accept applications throughout the year. However, the start date for exemption benefits varies according to when the individual applies. If the application is postmarked by March 15th, benefits will begin by July 1st of the same year. If the application is postmarked after March 15th, benefits will begin on July 1st of the following year.

In other NYS counties, applicants should file by the “taxable status date” to receive the July 1st benefit. Individuals should check with their City or Town Assessor to verify the taxable status date. To find the local assessor go to http://orps1.orpts.ny.gov/cfapps/MuniPro/.

Real Property Tax Credits

DESCRIPTION OF THE REAL PROPERTY TAX CREDITS

The NYS Real Property Tax Credit

The NYS Real Property Tax credit is designed for residents who have household gross income of $18,000 or less and pay real property taxes or rent for their residences, or both. The tax credit is issued according to the filer’s level of adjusted gross income, determined on the application form. If all household members are under age 65, the credit can be as much as $75. If at least one member of the household is age 65 or older, the credit can be as much as $375.

The NYC Enhanced Real Property Tax Credit

NYC Enhanced Real Property Tax credit is designed for NYC residents who have a household gross income of less than $200,000 and pay either real property taxes or rent for their residences. The credit can be as much as $500. If the amount of the credit is more than the tax for the year, the excess is treated as an overpayment of tax to be credited or refunded without interest.

QUALIFYING FOR THE REAL PROPERTY TAX CREDITS

Real Property Requirements

Homeowners

For both the NYS Real Property Tax Credit and the NYC Enhanced Credit, the filer or their spouse must have paid real property taxes for their residence and the current value of all real property (house, garage, and land) owned by the filer must be $85,000 or less.

In addition, if the filer is receiving rent from his/her property, any rent received for nonresidential use of the filer’s residence must be 20% or less of the filer’s total rental income.

Residences located on more than one acre of land can only use the amount of real property taxes or rent paid that applies to the residence. Only one acre of land can be used to calculate the credit.

Renters

For the NYS Real Property Tax credit, the filer or a member of the household must have paid rent for the residence. In addition, the rent paid must be $450 or less, not counting charges for heat, gas, electricity, furnishings or board.

For the Enhanced real property credit the filer must be paying rent for the residence (any amount).

Ineligible New York State Residents

Generally, individuals who reside in a home for senior citizens or a public housing project do not qualify for the credit because these facilities are exempt from paying real property taxes.

Dependency Requirements

The filer cannot be claimed as a dependent on someone else’s federal income tax return.

Residency Requirements

The residency requirements for the NYS Real Property Tax Credit and the NYC Enhanced Credit for a filer are:

Must have occupied the same New York State/New York City residence (dwelling) for six months or more in the previous filing year, and
Must be a New York State/New York City resident for the whole filing year

Note 1: Individuals cannot be a member of more than one household at one time.

Note 2: Individuals who owned and occupied more than one residence during the tax year, must add together the prorated part of real property taxes paid for the period s/he occupied each residence.

Citizenship/Immigration Requirements

Both the filer claiming the credit, and all qualifying dependents, must be U.S. citizens or immigrants who are legally residing residents. They must have either a Social Security Number or an Individual Taxpayer Identification Number (ITIN) to file a tax return.

Assets/Resources

There are no assets/resource requirements.

Income

NYS Real Property Tax Credit

The total household gross income of a filer and all members of his/her household must be $18,000 or less for the current tax filing year.

NYC Enhanced Real Property Tax Credit

The total household gross income of a filer and all members of his/her household must be $200,000 or less for the current tax filing year.

CLAIMING THE REAL PROPERTY TAX CREDITS

Married couples filing a joint return must file a joint claim on Form IT-214.

Real Property Tax Credit

Taxpayers should complete the IT-214 form, https://www.tax.ny.gov/pit/ads/efile_addit214-2d.htm, along with the New York State personal income tax return. For those who are not required to file a New York State income tax return, but who qualify for this credit, should complete and file Form IT-214 to claim a refund of the credit.

Enhanced Real Property Tax Credit

Taxpayers should complete the NYC-208, https://www.tax.ny.gov/pit/ads/efile_addnyc208-2d.htm along with the NYS personal income tax return.

For those who are not required to file can complete the New York State income tax return, but who qualify for this credit should complete and file the NYC-208 form.

See below, Additional Resources, for free tax preparation information.

Coordination of Tax Credits

STAR/ENHANCED STAR

Homeowners who qualify for SCHE automatically receive Enhanced STAR benefits. No additional application is required.

ENHANCED STAR/ SENIOR CITIZENS HOMEOWNERS’ EXEMPTION

Individuals who receive the senior citizens exemption, may be eligible to receive STAR and other property tax exemptions.

STAR/DHE

Individuals who apply for Disabled Homeowner exemption (DHE) may also apply for STAR.

SCHE/DHE

Owners can receive either the DHE or SCHE, but not both. When the property is owned by one or more persons, and one or more of the owners qualify for the DHE while the other owner qualifies for the SCHE, the owners have the option of choosing the more beneficial exemption.