Seniors Should Be Aware Of Tax Exemptions

Well it seems we have avoided the “fiscal cliff” – at least for the moment – but many Americans, especially seniors, still are wondering and worrying about how they are going to fare in 2013.

The start of a new year always gets people thinking about filing income tax and paying school taxes. However, many people, especially seniors, do not take advantage of all the tax exemptions they are entitled to. Some exemptions you can apply for once and then you will get it forever after. Others programs you have to reapply every year. This can be especially difficult on seniors as they age and are dealing with chronic health issues or those who rely on others to manage their money who may not be aware of all the rules.

The OFA advisory council and others across the state have been advocating for changes to the Enhanced STAR Program, which is one that required seniors to reapply each year. I am happy to report that the New York State Legislature has made changes to the Enhanced STAR program, which will allow seniors to auto renew their Enhanced Star Benefit through income verification, eliminating the need to reapply annually.

It means a little more paper work this year, but the additional hundreds of dollars in benefits certainly makes it worth your effort.

Here is why there is so much confusion: There are two programs available under the New York state Tax Relief (STAR) program that offer home owners a discount on their school taxes.

Basic STAR is available to everyone for their owner-occupied, primary residences where the owners’ combined income is less than $500,000. The program exempts the first $30,000 of the full value of a home from school taxes. Most of us get this basic STAR benefit. We applied once and never have to apply again unless our primary residence changes. Basic STAR benefits range from $240 to $782 per year in Chautauqua County, depending on your school district.

Enhanced STAR provides an increased benefit for the primary residences of senior citizens, age 65 and older, with qualifying incomes. This program exempts the first $63,300 of the full value of a home from school taxes as of 2013-14 school tax bills – up from $62,200 in 2012-13.

In the past, seniors had to reapply every year and provide a copy of their taxes as proof of income. In 2013, seniors who apply for Enhanced STAR benefit by completing the STAR application form (PR-425), provide a copy of their taxes and submit the Optional Income Verification Form (PR-425 IVP), will not need to reapply unless their residence changes.

The Income Verification Form is a simple one-page form on which you provide Social Security numbers for you and your spouse and agree to let New York state look at your filed income tax to verify your income.

This year the qualifying income is an adjusted gross income of $79,050 or less for your household. The income amounts change yearly, and some IRA distributions are subtracted, so check with your assessor to see if you qualify. I encourage seniors to take advantage of the Enhanced STAR program, which can mean a decrease in school taxes ranging from $480 to $1,566 per year, depending on your school district in Chautauqua County.

If you no longer file taxes, or if you do not want to complete the Income Verification Form, you can still apply for Enhanced STAR using the Renewal Application for Enhanced STAR (RP-425Rnw) and attaching a copy of your income taxes or a copy of your Social Security Income statement. Remember, without the Income Verification Form, you will have to reapply every year.

All STAR forms are returned to your local tax assessor. Forms can be printed from the Internet, are available at most town offices and all of our OFA offices, or you can contact our NY Connects Helpline at 753-4582, 661-7582 or 363-4582. We will be happy to send you the forms in the mail. It is important to check with your local tax assessor to see when the forms are due. In most towns, the deadline for filing for STAR benefits is March 1, but please check with your local tax assessor to be sure. For more information on the STAR program or to download forms from the Internet ,visit New York State Department of Taxation and Finance at www.tax.ny.gov/pit/property/star/index.htm or call our NY Connect helpline. Remember, we are here to help you.