BILL NUMBER: S5850
SPONSOR: SKOUFIS
 
TITLE OF BILL:
An act to amend the real property tax law and the tax law, in relation
to the definition of income in relation to the enhanced STAR exemption
 
PURPOSE:
This bill seeks to correct a lapse in the STAR program by treating
Thrift Savings Plans (TSPs) established before January 1, 1984, the same
as IRAs and annuities regarding income eligibility under the state's
STAR program. Like IRAs and annuities, TSPs established before January
1, 1984, did not trigger an employer (federal government) match.
 
SUMMARY OF PROVISIONS:
Section 1: Subparagrapgh (ii) of paragraph (b) of subdivision 4 of
section 425 of the real property tax law, it defines the term "income"
to refer to the adjusted gross income (AGI) as reported on an appli-
cant's federal or state tax return, with deductions for distributions
from individual retirement accounts, individual retirement annuities,
and thrift savings plans established before January 1, 1984, if those
distributions were included in AGI. If no tax return was filed, income
is defined as the AGI that would have been reported if a return had been
filed. Beginning with 2019 exemption applications, if an income determi-
nation includes individuals who did not file a return, they must submit
a statement detailing their income sources and amounts to the depart-
ment. This statement is subject to tax law confidentiality rules, and
the department will provide forms and instructions for filing. Addi-
tionally, local assessors must assist taxpayers upon request.
Section 2: Subparagrapgh (B) of paragraph 1 of subsection (eee) of
section 606 of the tax law, defines the "Affiliated income" refers to
the combined adjusted gross income (AGI) of all owners and their spouses
who primarily resided on a property as of December 31 of the taxable
year for the basic and enhanced STAR credits, with deductions for
certain retirement distributions. If an income determination includes
individuals who did not file a federal tax return, they must submit a
statement detailing their income sources and amounts. The local assessor
must assist taxpayers upon request. If a qualified taxpayer owned the
property during the year but not on December 31, income eligibility is
based on their ownership or residency status as of the first day of the
month they ceased ownership.
Section 3: Sets Effective Date.
 
JUSTIFICATION:
Most 401Ks and modern-day Thrift Savings Accounts (TSPs) are not eligi-
ble to reduce income under the STAR program because employers often
match those accounts. However, federal agencies only started matching
employee TSP contributions for those hired after January 1, 1984. Thus,
employees hired before that date with TSPs have contributed 100% of
their TSPs and should be treated like IRAs and annuities under the STAR
program.
 
LEGISLATIVE HISTORY:
Senate
2017: S6058A, Passed Senate
2018: S6058A, Reported and Committed to Rules
2019: S2313, Passed Senate
2020: S2313, Reported and Committed to Finance
2021: S1645, Referred to Finance
2022: S1645, Referred to Finance
2023: S1133, Referred to Finance
2024: S1133, Referred to Finance
Assembly
2017: A7537B, Referred to Real Property Taxation
2018: A7537B, Referred to Real Property Taxation
2019: A7452, Referred to Real Property Taxation
2020: A7452, Referred to Real Property Taxation
2021: A2226, Referred to Real Property Taxation
2022: A2226, Referred to Real Property Taxation
2024: A8850, Referred to Real Property Taxation
 
FISCAL IMPLICATIONS:
Minimal to the state.
 
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law.

Statutes affected:
S5850: 425 real property tax law, 425(4) real property tax law, 606 tax law, 606(eee) tax law