NYS STAR rebate - claim on either federal or state taxes?

In 2008, we got a STAR (School TAx Relief) rebate check from NYS. Do I need to claim this as income on either my federal or state return? Thanks.

Mark

Indiana627,

Maybe.

The New York Star Rebate program is poorly designed and costly operated. Property owners receive this rebate on school taxes they pay on their primary residence. Often the state sends out a letter reminding the home owner to apply for the rebate. The home owner sends in a form so the state can issue a check to the home owner. How many more hands need to touch this rebate? In some situations the rebate is more than the home owner paid in taxes.

When you itemize your federal deductions on Schedule A, and include your school taxes as one of the deductions, you must deduct the rebate from the amount of school tax you paid. When your payments are greater than your rebate, you can use the amount paid after deducting the rebate as an itemized deduction.

When your rebate is in excess of the school tax you paid, you must claim the excess as income. You can put this excess on line 21, Other Income, of your federal 1040.