Property tax question: STAR rebate check

JJ · Joined: 05 Feb 2008 Posts: 3

If you received a STAR (School Tax Relief) rebate check from NY state,
should that amount be subtracted from the amount of property tax paid -
or should it be entered in some other location on the federal tax forms?

Thanks.

-JJ

Archived from group: us>taxes

Paul Thomas, CPA · Joined: 25 Aug 2007 Posts: 3094

"JJ" wrote
> If you received a STAR (School Tax Relief) rebate check from NY state,
> should that amount be subtracted from the amount of property tax paid - or
> should it be entered in some other location on the federal tax forms?

If you itemized deductions in a prior year - taking a deduction for those
property taxes paid - then the refund of those taxes is income to you. I'm
not sure if the state will issue a form reporting that refund.

Lacking any official form, report the refund (only if you previously
deducted it) as other income (Line 21).

If you didn't deduct those taxes paid in a prior year, then it's not taxable
income to you, and need not be reported.

--
Paul A. Thomas, CPA
Athens, Georgia

JJ · Joined: 05 Feb 2008 Posts: 3

Thanks.

Though I didn't find it yesterday when I was googling for the answer, I
did find this answer today on the NY tax web page. It looks like the
answer depends on what year the rebate is for, and as you point out, you
only have to include it if you itemized. If the rebate is for taxes
payed in a prior year then your answer is correct. If the rebate is for
taxes payed in 2007 and you received the rebate in 2007, then it looks
like you simply subtract the amount from the taxes payed.

-JJ

> Q: Do I have to pay tax on my rebate amount when I file my 2007
income > tax return?
>
> A: Generally no; most New Yorkers will not pay tax on the rebate
> amount. However, if you itemize your deductions when you file your
> 2007 income tax return, you will have to deduct the amount of the
> rebate from your property taxes paid. Also, in the unusual case where
> your rebate is greater than the property taxes you pay, the excess is
> considered income and needs to be included on your 2007 income tax
> return.
>
> If you receive your 2007 rebate in 2008, you would not deduct it from
> property taxes paid in 2007. The rebate would be considered income in
> 2008 and included on your 2008 income tax return.

Paul Thomas, CPA wrote:
> If you itemized deductions in a prior year - taking a deduction for those
> property taxes paid - then the refund of those taxes is income to you. I'm
> not sure if the state will issue a form reporting that refund.
>
> Lacking any official form, report the refund (only if you previously
> deducted it) as other income (Line 21).
>
> If you didn't deduct those taxes paid in a prior year, then it's not taxable
> income to you, and need not be reported.
>
>
>
>

Don Priebe · Joined: 25 Aug 2007 Posts: 574

> If you received a STAR (School Tax Relief) rebate check from NY state,
> should that amount be subtracted from the amount of property tax paid - or
> should it be entered in some other location on the federal tax forms?

The NY STAR rebate check you received in 2007 is a rebate of the school
taxes you paid in 2007.

If the rebate is less than your school taxes and you itemize deductions,
subtract the rebate from the school taxes and use the net amount on Schedule
A.

If the rebate is less than your school taxes and you do not itemize
deductions, do nothing.

If the rebate is more than your school taxes, enter the excess as other
income on line 21 of the 1040.

--
Don EA in Upstate NY

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