This article summarizes the City of New York's change in 2026 with respect to Form NYC-1127, disallowing the STAR credit beginning in tax year 2025.
Prior to the filing deadline of May 15, 2026, the City of New York disallowed taxpayers to claim the STAR credit on Form NYC-1127.
Here is part of their communication to taxpayers who claimed a credit on NYC-1127 Schedule B line A1 or A2:
"A credit for the School Tax Relief (STAR) benefit appears on lines A1 and A2 (Schedule B) of the Section 1127 return. STAR has been a credit against the New York State personal income tax since 2016, and it is not allowable as a credit on the Section 1127 return.
"Please do not claim the STAR credit on your Section 1127 return. If you do, your tax filing will be incorrect, and this may impact your refund or balance due.
"If you have questions about how to complete your filing, please contact us at www.nyc.gov/eservices or email 1127help@finance.nyc.gov.
"Please note that we will not recalculate your Section 1127 liability for tax years before 2025. You will not be charged any additional amount for those years, even though STAR has not been an allowable credit since 2016."
In TaxSlayer Pro, the calculations for the school tax credits were removed from the NYC-1127 return for returns created after July 12, 2026. For returns created prior to July 13, 2026, a menu item is included to remove the calculation.
Additional Information: