Hundreds of People Are Standing in Line to Prepay Property Taxes. It Might Be For Nothing
In an echo of the Black Friday hordes that follow Thanksgiving, the post-Christmas lull has given way to winding lines of taxpayers. Worried about the recently passed tax reform bill that caps federal tax deductions for state and local taxes at $10,000, citizens in areas with pricey real estate are rushing to prepay the property taxes that account for a significant chunk of their deductions, the Wall Street Journal reports.
In most cases, they’re aiming to pay their taxes for both 2017 and 2018 before calendar 2017 comes to a close, since the new cap goes into effect in 2018.
“It’s been insane here,” Milton, Mass., town treasurer James McAuliffe told the Journal, describing the lines of citizens attempting to prepay their property taxes.
A similar scene also played out in Fairfax, Va., where hundreds of homeowners stood in line, WTOP radio reported.
According to the non-partisan Tax Foundation, homeowners in the three U.S. counties with the highest average property-tax bills–New York’s Nassau, Rockland and Westchester counties–have median annual tax liability exceeding $10,000.
Not all counties are allowing their citizens to prepay property taxes. While New York Gov. Andrew Cuomo, for instance, signed an executive order Friday allowing New Yorkers to make partial prepayments on their 2018 taxes, Westchester County said it cannot collect those taxes early.
“Westchester County has looked into the feasibility of having residents pre-pay their county taxes,” Ned McCormack, senior advisor to the Westchester County executive, said in a statement. “It is just not possible for the county to issue its 2018 tax warrants to localities within the next four days for a whole host of legal, operational and practical reasons.”
Local municipalities are responsible for property tax collection.
There’s a chance that, even in counties that allow prepayment, waiting in lines could be a wasted effort. It’s still unclear whether the IRS will allow taxpayers to take deductions for 2017 based on those prepayments of 2018 taxes.