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Department of Taxation and Finance

02/26/2024 Assessment Community Weekly

Questions and Answers about the new 459-c permanent partial disability adjustment percentage

Effective March 21, an award letter from the Workers’ Compensation Board (WCB) based on either permanent total disability or permanent partial disability may be submitted as proof of disability for purposes of the exemption authorized by RPTL 459-c. As we announced on February 13, an amendment was recently signed into law that gives local governments and school districts the option to adjust the exemption percentage for those exemptions that are based on permanent partial disability.

Below are some questions and answers about the law change.

May taxing jurisdictions choose whether they accept the WCB award letter as proof of disability?

No. The forms of proof are the same for all taxing jurisdictions offering the exemption. They are not subject to local option.

What is the new option to adjust the exemption percentage?

For the first time, homeowners can be eligible for the 459-c exemption if they have a WCB award letter granting them compensation based on either permanent total disability or permanent partial disability. Chapter 6 of the Laws of 2024 provides the option to adjust the exemption percentage for exemptions based on a permanent partial disability. (There is no such option for exemptions based on permanent total disability.)

The option allows the taxing jurisdiction to adjust those exemptions that are based on permanent partial disability by applying an adjustment percentage to the exemption percentage that would otherwise be applicable. The adjustment percentage selected may be no less than 50%, and no greater than 100%.

Can you explain how this adjustment would work?

Sure. As an example, let’s consider an individual with a permanent partial disability who would qualify for a 50% exemption based on their income because the taxing jurisdiction has not opted to apply an adjustment percentage for permanent partial disabilities.
 
If the taxing jurisdiction had opted to apply an adjustment percentage for permanent partial disabilities, the individual’s exemption would be adjusted accordingly. For example:

  • If it had opted to apply an adjustment percentage of 90%, the exemption would be 45% rather than 50%.
  • If it had opted to apply an adjustment percentage of 80%, the exemption would be 40% rather than 50%.
  • If it had opted to apply an adjustment percentage of 70%, the exemption would be 35% rather than 50%.
  • If it had opted to apply an adjustment percentage of 60%, the exemption would be 30% rather than 50%.
  • If it had opted to apply an adjustment percentage of 50%, the exemption would be 25% rather than 50%.

Similarly, suppose the sliding scale feature is in effect in this jurisdiction, and the individual with a permanent partial disability has qualified for a 40% based on their income because the taxing jurisdiction has not opted to apply an adjustment percentage.

If the taxing jurisdiction had opted to apply an adjustment percentage for permanent partial disabilities, the individual’s exemption would be adjusted accordingly. For example:

  • If it had opted to apply an adjustment percentage of 90%, the exemption would be 36% rather than 40%.
  • If it had opted to apply an adjustment percentage of 80%, the exemption would be 32% rather than 40%.
  • If it had opted to apply an adjustment percentage of 70%, the exemption would be 28% rather than 40%.
  • If it had opted to apply an adjustment percentage of 60%, the exemption would be 24% rather than 40%.
  • If it had opted to apply an adjustment percentage of 50%, the exemption would be 20% rather than 40%.

Note: The adjustment percentages shown above are merely examples of possible adjustment percentages; other percentages would also be permissible as long as they are no less than 50% and no more than 100% (e.g., 75%, 66.67% or 98.6% would all be OK).

Would a taxing jurisdiction that is already offering the 459-c exemption be required to adopt a local law or resolution if it wished to apply an adjustment percentage for permanent partial disabilities?

Yes. The use of an adjustment percentage is subject to local option.

It’s time to update your existing IVP entries

First, we thank you for all that you do on behalf of homeowners’ STAR benefits in your communities! Annually, one of those tasks is to keep the IVP Tool updated for properties receiving the Enhanced STAR exemption.

New IVP participants

In early April, we will issue the first round of STAR eligibility reports for municipalities with May 1 tentative roll dates. To ensure that we have complete data for new IVP participants for your municipality, please follow these deadlines:

  • If you're transmitting the data to us for data entry, please do so by Wednesday, March 6. (For details see How to transmit IVP forms to the Tax Department.)
  • If you're entering the IVP data directly into the IVP Tool, complete your entries by Monday, March 11.

Existing IVP participants

If the owners have changed (new owners, deceased owners, removal of owners), update the enrollment but do not close it.

If a spouse has passed away and the surviving spouse is now the owner, simply update the existing enrollment—even if the spouse wasn’t previously on the deed. Do not create a new enrollment in this scenario.
 
However, do close the enrollment for any of the following:

  • all of the Enhanced STAR recipients are deceased
  • the property has sold
  • the IVP enrollment was created in error
  • all owners are no longer residents

For complete instructions, see the IVP Tool User Guide, which includes instructions for merges and splits (see page 12).

Again, many thanks!

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