Governor moves to ‘postpone the pain’
OKs paying ’18 property taxes early to delay loss of deduction
Some New York state residents might want to “postpone the pain” of the federal tax overhaul by paying some of next year’s local property taxes before Jan. 1, Gov. Andrew Cuomo said Friday.
Cuomo, a Democrat, signed an executive order allowing the prepayments. It will be up to local governments and school districts to issue tax warrants or take other steps necessary to be able to receive the payments. Cuomo conceded that prepaying some or all of next year’s estimated property taxes may not
be an option for many New York households.
Still, he said, it’s a “viable option” for taxpayers who want to tax advantage of the current deduction for state and local taxes, an especially popular deduction for many property owners in high-tax New York state. The deduction will be capped at $10,000 under the federal tax overhaul that was signed Friday by Republican President Donald Trump.
“You can partially prepay or fully prepay and get your deductions for your property tax payment,” Cuomo said. “At least this device will postpone the pain for one year.”
The governor said his administration will contact local governments and school districts to urge them to send out estimated tax bills for 2018 to allow taxpayers who have the financial resources to consider making a prepayment. Because the new federal tax rules will still allow a deduction of up to $10,000, the prepayment option only makes financial sense if the taxpayer will pay more than $10,000 in local taxes, state officials said.
In Dutchess County, officials adopted the county tax warrant on Monday and began working quickly to get the tax information to local assessors, said Communications Director Colleen Pillus.
“Normally, the tax rolls would be available to the towns and villages at the start of the new year and tax bills get printed throughout January and given to the towns for mailing,” she said.
“This year, the tax rolls were finalized early, and we have guaranteed to the towns they will have them by Dec. 28,” she said. “We accelerated the process.”
Pillus said residents will not receive their actual tax bills before the end of the year. Instead, she said, if residents want to prepay their taxes, they’ll have to contact their local assessor.
She said it is up to the tax collectors in each town to decide whether they want to accept 2018 property taxes early.
Ulster County Finance Commissioner Burt Gulnick said although Ulster’s tax warrant is dated Dec. 31, the tax rolls are available online to tax assessors. Some towns, including Saugerties, already have announced they will accept 2018 payments in advance.
Tax collectors in many states are seeing a surge in property tax prepayments before 2018 in an effort to cash in — for one last year — on a deduction that the federal tax overhaul will limit. Since a national income tax began more than 100 years ago, people have been allowed to deduct from their income the amount they’ve paid for state and local taxes.
The new $10,000 cap on the deduction will hit hardest in states such as New York, New Jersey, Connecticut and California — where the average state and local deductions in 2015 all topped $17,000.