Christie: New Jersey Municipalities Must Accept Prepayment of 2018 Property Taxes - NBC New York

Christie: New Jersey Municipalities Must Accept Prepayment of 2018 Property Taxes

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    NEWSLETTERS

    Rush to Pay 2018 Taxes in Face of New Law

    People in the tri-state are scrambling to pay their 2018 property taxes in advance of new federal limits on how much they can deduct. Michael George reports.

    (Published Tuesday, Dec. 26, 2017)

    What to Know

    • People in the tri-state are scrambling to pay their 2018 property taxes in advance of new federal limits on how much they can deduct.

    • Tax reform law signed by President Donald Trump caps the deduction for state and local taxes at $10,000

    • That's expected to hit hard in New Jersey, where residents pay the highest property taxes in the nation.

    New Jersey Gov. Chris Christie has ordered local governments to accept payments for 2018 property taxes in the waning calendar days of 2017, an effort to help homeowners take advantage of a major tax deduction before it is wiped out in the new year.

    Those payments must be credited as received in 2017 as long as they are postmarked on or before Dec. 31, Christie says.

    "This executive order requires local officials to dedicate the resources and staffing to serve New Jerseyans who are planning in this way for their families and their futures," Christie said in a statement. 

    Homeowners have been lining up in droves at local tax collection offices, hoping to avoid paying more when the new 2018 federal tax code kicks in. 

    On Long Island, Hempstead town Tax Receiver Donald Clavin said "thousands" of people packed his office Tuesday trying to pay their 2018 property and school taxes a year in advance.

    "This is almost chaotic," Oyster Bay Tax Receiver James Stefanich told Newsday. He said homeowners began lining up in the cold an hour before his office opened.

    Similar scenes played out at tax collection offices around the country in places with high local taxes.

    The tax overhaul signed last week by President Donald Trump puts a new $10,000 limit on the amount of state and local taxes people can deduct from their income when calculating their federal tax liability.

    That new cap could translate into a tax hike of hundreds or even thousands of dollars in mostly wealthier, high-tax communities in California, Connecticut, New York and New Jersey and other states.

    People in some communities are trying to effectively delay that hike for a year by paying their 2018 taxes in advance, though it isn't clear whether doing so will pay off.

    The new law bars deductions for income taxes paid early but is silent on prepaid property taxes. The IRS hasn't yet said how it would handle prepayments.

    That uncertainty didn't stop people from flooding into local taxes offices after Christmas.

    "I know later on it is going to hurt me," Scott Arbuse, of East Meadow, New York, said of the disappearing tax deduction as he waited to make a payment. "But at least I save some money now."

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