Did your STAR check shrink this year? Or did a state letter say you no longer qualify for Enhanced STAR? The cause is almost always your income from two years ago. The state reads your 2024 tax return to decide your 2026 STAR. If that year's income was over $110,750, you get Basic STAR instead. In Nassau, the average Enhanced check last year was $2,507. The average Basic check was $881. So the drop costs about $1,600 for the year.
The good news is that it comes back on its own.
How the state counts your income
The state takes your federal adjusted gross income. Then it subtracts the taxable part of your IRA withdrawals. On the 2024 federal Form 1040, that's line 11 minus line 4b. On the New York IT-201, it's line 19 minus line 9.
Only the owners who live in the home count, plus their spouses who live there. Say a parent co-owns with a child who lives elsewhere. The child's income is left out.
The IRA subtraction is the only one. Everything else in adjusted gross income stays in. That includes:
- A pension or a 401(k) payout
- The taxable part of Social Security
- A gain from selling stock, a business, or a second home
- Interest and dividends
- A 401(k) rolled into a Roth account. The taxable amount shows up as pension income.
The limit moves each year. For 2026 STAR it's $110,750, read from your 2024 return. For 2027 STAR it's $113,550, read from your 2025 return.
One high year costs one year of Enhanced
Because of the two-year lag, a big one-time gain in 2024 doesn't touch your 2024 or 2025 STAR. It drops you to Basic for 2026 only. In 2027 the state reads your 2025 return. If that year was back under the limit, Enhanced returns.
The state says it can't bend this rule. In its own words, it cannot "disregard one-time sources of income, even if your income is normally much lower."
What the letter means
In spring, the state mails a letter to homes that lost Enhanced. Its code is RP-5300-INC. If your income was still under the Basic limit, the letter says you'll get Basic STAR this year. You don't have to do anything.
Think the state has the wrong number? You have 45 days from the date on the letter to disagree. Send a copy of the letter, a short note saying why, and proof. The state accepts an amended tax return, a signed separation agreement or divorce judgment, or a death certificate and will if an owner has died. The address and fax number are on the state's STAR letters page.
When it comes back
You don't re-register. The state checks every STAR home every year. It gives you the highest level you qualify for. Once your income from two years back is under the limit again, Enhanced resumes. If you had direct deposit, it stays set up.
If you still have the old exemption on your bill
Some longtime owners get STAR as a line on the school tax bill instead of a check. The same income test applies. Two extra rules come with it:
- If your income from two years back was between $250,000 and $500,000, the exemption stops for that year. The letter gives you 45 days to switch to the check. The switch is permanent.
- If it was over $500,000, there's no STAR that year at all.
If you don't file a tax return
The state can't see your income. So it may mail you a letter asking for an income worksheet. Answer it within 45 days. Ignoring it costs you the year's STAR. Once every owner in the home has sent the worksheet three years in a row, the state stops asking. It starts again only if your income goes over a limit.
Our who qualifies post has the full set of rules, and our STAR amounts post has last year's Basic and Enhanced amount for your school district.
Every rule here comes from the New York State tax department's STAR eligibility page and its STAR letters page. This post explains the STAR rules. It isn't tax advice.