Between the STAR credit and the STAR exemption, the credit generally saves you more money because it can increase by up to 2% each year while the exemption savings are frozen at the prior year’s amount and cannot grow.1Department of Taxation and Finance. Maximum 2025-2026 STAR Exemption Savings For most New York homeowners the choice is already made: the exemption has been closed to new applicants since 2015, so anyone who bought a home after that gets the credit. If you still hold the older exemption, you can keep it, or you can voluntarily switch to the credit to capture the annual growth.
How Each One Reaches You
The two benefits deliver the same type of school tax relief in different ways. The STAR exemption reduces your property’s assessed value before the school tax rate is applied, so the savings appear as a lower number on the school tax bill itself. You never handle the money separately; you just pay less.
The STAR credit works in reverse. You pay the full school tax bill, and New York State sends your benefit separately by check or direct deposit, timed to arrive before the bill is due so you can use it to cover the bill.2New York State. Register for STAR or Update Your STAR Registration Direct deposit is available through the Tax Department’s Homeowner Benefit Portal; enroll at least seven days before the department processes your credit or a check goes out instead.3Department of Taxation and Finance. STAR Credit Direct Deposit
Both come in two tiers. Basic STAR is open to any owner-occupant regardless of age. Enhanced STAR is the larger benefit for homeowners where at least one owner living in the home is 65 or older by December 31 of the benefit year, subject to an income limit of $107,300 for the 2025–2026 school year and $110,750 for 2026–2027.4Department of Taxation and Finance. Types of STAR For 2025–2026, Basic STAR exempts $30,000 of assessed value and Enhanced STAR exempts $86,100, though the actual dollar savings depend on your school district’s tax rate and local equalization rates.5Department of Taxation and Finance. Calculating STAR Exemptions and Credits
Why the Credit Saves More Over Time
This is the piece most homeowners miss when they compare the two. The exemption’s savings cannot exceed the prior year’s savings amount for your school district segment, which means it is effectively frozen and will never grow.1Department of Taxation and Finance. Maximum 2025-2026 STAR Exemption Savings The credit can increase by as much as 2% a year. Over a decade in the same home, that gap compounds.
The Tax Department publishes side-by-side numbers for every municipality and school district. In New York City for 2025, the Enhanced STAR credit was $730 while the Enhanced STAR exemption savings were $659, a difference of $71 in a single year. The Basic STAR credit was $275, compared with $269 for the exemption.6Department of Taxation and Finance. 2025 Final STAR Credit and Exemption Savings Amounts In some upstate districts where the two amounts have been diverging longer, the spread is wider. Look up your municipality on the Tax Department’s website to see the current comparison for your address.
Who Actually Gets to Choose
For most homeowners, there is no choice to make.
If you have been receiving the STAR exemption continuously on the same primary residence since 2015 or earlier, you can keep it. If you bought a home after 2015, or if you move to a new home now, the exemption is not available to you and you must use the credit.7Department of Taxation and Finance. STAR Resource Center
The switch is sometimes mandatory even for long-time exemption holders. Enhanced STAR exemption recipients who receive Form RP-425-RDM from the Tax Department are required to register for the credit; follow the instructions on that letter promptly to avoid a gap in benefits.
Switching from the Exemption to the Credit
If you currently have the exemption and want the credit’s growth potential, you register for the credit through the Tax Department’s Homeowner Benefit Portal, the same way a new applicant would. The department notifies your local assessor to remove the exemption once your credit registration is in place.7Department of Taxation and Finance. STAR Resource Center
The one real risk in switching is timing. If the exemption comes off your tax roll before the credit registration is processed, you can end up paying the full school tax bill with no reimbursement for that year. Before initiating a switch, confirm with the Tax Department that your credit registration is active and that the timing lines up with your school district’s tax cycle.
Income Limits Also Favor the Credit
The credit is more generous on income eligibility as well, at least for Basic STAR. The Basic STAR credit is available to households with combined income of $500,000 or less, while the Basic STAR exemption cuts off at $250,000.8Department of Taxation and Finance. STAR Eligibility Enhanced STAR uses the same income limit under either method: $107,300 for 2025–2026, rising to $110,750 for 2026–2027.4Department of Taxation and Finance. Types of STAR
STAR income is not the same as federal adjusted gross income. It is your federal AGI minus the taxable portion of IRA distributions. On the 2024 Form 1040, that means line 11 minus line 4b. On New York’s IT-201, subtract line 9 from line 19.8Department of Taxation and Finance. STAR Eligibility Eligibility for the 2026 benefit is based on your 2024 return.
One change is worth watching. Starting with the 2026 benefit year, the Tax Department will verify the income of all STAR recipients, not just Enhanced STAR. Basic STAR recipients whose income now exceeds the threshold will lose the benefit through this automated cross-check against federal tax data.2New York State. Register for STAR or Update Your STAR Registration
Both Require the Home to Be Yours
Under either method, you must own the property and use it as your primary residence, and the property must be residential. Commercial and industrial properties do not qualify.8Department of Taxation and Finance. STAR Eligibility
STAR Does Not Follow You When You Move
Neither the exemption nor the credit transfers to a new home. If you sell and buy another property, you register for the STAR credit on the new home from scratch; the exemption cannot be transferred to a newly purchased home under any circumstances.9Tax.NY.gov. STAR Frequently Asked Questions (FAQs)
There is a narrow transitional benefit. If the previous owner of your new home had a STAR exemption and the sale closed after the local taxable status date (March 1 in most towns), the seller’s exemption carries over to your first school tax bill. You then start receiving the credit the following year once you register.9Tax.NY.gov. STAR Frequently Asked Questions (FAQs) If you were already on the credit at your old home, re-register at the new address; the old registration does not carry over.