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State property tax rebates will have added requirement

State tax officials say they expect to begin mailing out $1.3 billion worth of property tax rebates in September after an involved process that will include at least three government agencies and applications by millions of property owners.

As with last year's rebate, the money will reduce the amount that certain taxpayers -- those who itemize their tax returns -- are able to deduct in property taxes on their income tax forms next year.

In Erie County, the average rebate check will be $316.

Different from last year's rebate program is a new requirement that property owners -- except those over age 65 who are enrolled in the state's Enhanced STAR program -- will have to apply to get the rebates.

Those application forms will not be mailed to homeowners by the state Tax Department until sometime in late July or early August -- after the tax agency gets information on all property taxpayers.

Homeowners have until Nov. 30 to return the applications to the tax agency or forfeit this year's rebate.

This year's rebate program is income based; it includes three different income brackets, with the lowest being household income under $90,000 and rising to $250,000, at which point the rebate is eliminated.

The state will use a taxpayer's income from 2005 -- the most complete year of tax returns available -- to determine the taxpayer's income bracket. That, in turn, will determine the size of the rebate.

Thomas Bergin, a Tax Department spokesman, said the agency is still finalizing details of the program. He said there are 3.3 million property owners who claim a STAR exemption; what percentage of those will qualify for the rebate is not yet known, he said.

Those property owners who itemize deductions on their federal and state tax returns are required to lower the amount of their school district taxes in their real property tax deduction next year, Bergin said.

Of the 8.9 million tax filers, he said about 61 percent claimed the standard deduction on their federal return and 75 percent claim it on their state return.

The rebate program began last year; the checks were timed to hit taxpayers' mailboxes shortly before last fall's elections.

This year's program will see the rebate checks being sent out within about a month after applications are returned to the tax agency. Before mailing out rebates, the tax agency must match the applications against a property taxpayer's 2005 income tax filing in order to determine the size of the rebate. There are special provisions for people who did not have to file tax returns in 2005 or who were living out of the state that year.

For seniors enrolled in the Enhanced STAR program, the law states that their checks be sent "in a timely manner." Bergin said that timetable is still to be worked out.

Gov. Eliot L. Spitzer insisted that the rebate program be targeted to middle-class taxpayers; last year, all homeowners were eligible, regardless of income levels. His budget this year proposed a $1.5 billion rebate program. Senate Republicans sought a $2.6 billion alternative. Both sides actually went lower than Spitzer originally proposed in the final budget deal by $200 million -- money officials said was needed to give public schools more money. The final deal also expanded the number of people at higher income levels eligible for a rebate, thereby reducing the rebate checks from what had been proposed for those at lower income levels.

The Spitzer administration estimates that about 10 percent of eligible taxpayers will not apply for various reasons, leaving nearly $200 million in Albany.


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