Penalties related to the STAR Program

Who is subject to penalties?

Taxpayers who make a material misstatement on a STAR exemption or STAR credit application are subject to penalties.

A material misstatement means an applicant:

• claimed a property was their residence when it was not;
• claimed they had relinquished the STAR exemption on a former primary residence when they knew they had not; or
• misrepresented their age or income to appear eligible for the Enhanced STAR exemption.

What are the penalties?

The penalties include disqualification from either the STAR exemption or the STAR credit for six years, and the possibility of criminal prosecution.  In addition, exemption recipients may be subjected to:

• a penalty tax, equal to the greater of $100 or 20% of the improperly received exemption benefits, not to exceed $2,500 (penalty tax is retained by assessing unit); and
• the requirement to repay up to six years of improperly received exemption benefits, plus interest and a $500 processing fee (fee is retained by the assessing unit).

The assessor is empowered to impose penalties associated with material misstatements on applications for the STAR exemption. The Commissioner of Taxation and Finance is empowered to impose penalties associated with material misstatements on applications for the STAR credit.