ALBANY -- It's that time of year again in New York: Start checking the mailbox for a property-tax-rebate check from the state.
But this year comes with some new wrinkles, and the end of a $350 income-tax deduction for residents with children.
And if you're a fairly new homeowner, you will once again have to wait for a check in the mail to cover for a portion of your school taxes -- a change started last year to the popular STAR program that drew wide criticism for delays in getting the checks to residents.
If you haven't moved, you will still get the STAR rebate upfront.
State officials said the system is much improved from last year, and all the STAR checks to new homeowners should be out on time: in time for school taxes to be paid, which for much of the state is Sept. 30.
About 38,000 of the roughly 120,000 STAR checks are already out, and the rest will be moving in advance of the school bills due, the tax department said.
"We’re in a good place for this year," Nonie Manion, the acting commissioner for the state Department of Taxation and Finance, told the USA Today Network's Albany Bureau.
There's more: All homeowners with an adjusted gross household income of $275,000 or less will get a new type of rebate check in the mail this fall, if their school stayed under the state's property-tax cap.
The check -- called the property tax relief credit -- will be a rebate based on a percentage of what you get back each year through STAR, which provides a savings on school taxes.
Those checks will start going out as early as November, and it could take a few months for all 2 million checks to hit mailboxes, state officials said.
The average will be $179 per household, the tax department estimated. Then in January, income-tax rates for the middle class will start to go down.
Here's how it will all work:
For the past three years, the state mailed out "property-tax freeze" checks: It was a rebate for the annual increase in school and municipal taxes.
Under the program, checks went to homeowners outside New York City who had a taxable household income of $500,000 or less -- and if their municipalities and schools stayed under the property-tax cap and submitted an efficiency plan.
The checks ranged from less than $200 to more than $800, depending on how much a homeowner’s taxes rose each year.
But that program expired this year after it was first approved in 2014 by the state Legislature and Gov. Andrew Cuomo -- aimed, like all the programs, at limiting the highest cost of living in New York.
That's not the only tax break that expired: The Family Tax Relief Credit is done.
The credit, also a three-year program, was a $350 check in 2014 to income-eligible people who had children under 17. Then it switched to an income-tax deduction for the final two years. But it ended with this year's tax filings for 2016.
With the freeze checks finished, they are essentially being replaced by the property tax relief credit, which the Legislature and Cuomo approved in 2015.
Last year, the program started as a flat amount: $185 for upstate residents and $130 downstate, which was defined as the Metropolitan Transportation Authority region.
This year, it's much different and aims to address target homeowners with the most need.
So the four-year, $1.3 billion program will give the largest percentage back to homeowners who earn the least.
For those making under $75,000, the checks will be equal to 28 percent of what you get back in STAR each year.
So if you get $1,000 a year off your school taxes each year through STAR, you could expect a check this fall for $280.
The percentage back gets less the more you make: A household between $75,000 and $150,000 will get a check for 20.5 percent of their STAR break, and the percentage drops to 5.5 percent for those earning between $200,000 and $275,000.
The percentage grows, though, over the final two years of the program, hitting as high as 85 percent back for those earning less than $75,000 in 2019.
For seniors who receive Enhanced Star, the check back will be for 12 percent of the STAR rebate, growing to 34 percent in 2019.
Other new tax breaks
STAR is a break on school taxes.
For homeowners who earn less than $500,000 a year, they receive a tax exemption on the first $30,000 of the full value of their home. For senior citizens earning less than $86,000, they get an exemption on the first $65,500 of their home value -- so it's a larger tax savings.
The tax department said it hopes to start getting the property-tax checks out in November, but it's a complicated process: The agency has to match homeowners' incomes with their STAR tax breaks and figure out how much to send out.
But that's not all.
Starting in January, state income-tax rates for those earning less than $300,000 a year are set to drop slightly and will continue to decline until 2025 -- part of a middle-class tax cut deal Cuomo and the Legislature reached in 2016.
By 2025, income-tax rates for those earning between $40,000 to $150,000 will drop from 6.45 percent -- which is the current rate -- to 5.5 percent. It will drop from 6.65 percent currently for those earning between $150,000 and $300,000 to 6 percent over the same period.
Also, a child-care credit for residents earning between $60,000 and $150,000 will increase starting in January, doubling it from an average of $169 to $376, according to Cuomo's office.
In 2016, as part of the budget deal in April, the state Legislature and Cuomo decided that for people who bought their homes after August 2015, the state would send them a check for their STAR rebate instead of getting it as an upfront savings.
Under the old system, homeowners get the upfront savings, and then the state pays back the schools the difference.
It was a bigger change than perhaps lawmakers expected for the massive, $3 billion a year program.
Some new homeowners said they weren't getting the checks in time to pay their school taxes, and they had to front the entire amount.
]The STAR rebates can be sizable: Basic STAR last year averaged $750 a household, and it was about $1,400 for seniors getting Enhanced STAR.
The tax department said it has improved its system, is working more cooperatively with local assessors and is confident all the checks will be sent out on time.
It improved its online reporting system and has a new online tool to tell residents when the STAR checks are expected to be issued in an area.
Due to the backlash earlier this year, the state Legislature let the tax department estimate the STAR check amounts, which has improved the process and has been accurate, Manion, the acting commissioner, said.
There's also another impetus for the tax department to get the checks out: The Legislature this year included a measure in the state budget that will require the state to pay homeowners 3 percent interest if the checks are late.
"Last year, the timing was tough, and we got some law changes to make us more successful this year," Manion said.
To find more details about New York's property-tax checks, visit: www.tax.ny.gov.
What do I have to do?
The tax department will automatically mail the property tax relief credit checks to you, likely starting in November and taking several months to send all 2 million of them.
And if you've owned your home prior to August 2015, you will still get your separate, STAR rebate upfront when your school taxes are due.
But if you are a new homeowner since August 2015, you have to register with the state for the STAR break to get a check in the mail.
STAR is available to those who own your home, it’s your primary residence, and your income is $500,000 or less.
To register online, visit: www.tax.ny.gov/pit/property/star/default.htm
2 On Your Side took three of the most popular questions from viewers to the state on Thursday. Many people want to know how to check the status and the amount of their checks. There's a new online tool to help you this year. Select your county, school district, and city or town. For Buffalo, for example, it'll tell you the STAR credit checks have been issued if you registered before July 1, 2017. You don't have to type in any personal information, but if you have more questions, there's a number for you to call.
A lot of people also want to know if they'll get a check if they bought a house at the beginning of this year. 2 On Your Side's Kelly Dudzik talked to a spokesperson from the Department of Taxation and Finance. He told her that if you registered, yes, you will get a check- as long as you meet all of the other eligibility requirements.
For Basic STAR, you must own your own home, it has to be your primary residence, and your income must be $500,000 a year or less.
Finally, how much money will people get? The state says for Basic STAR, it's based on the first $30,000 of the full value of your home and your school tax rate. Last year, the average Basic STAR rebate was $750.
Remember the property tax relief credit is separate- those checks will probably start going out in November.