IRS allowing prepaid property taxes as deductions; clerks trying to keep up

IRS officials say they will allow 2018 property taxes to be deducted on federal returns, as long as they are paid in 2017, and the property is assessed before 2018.

LANCASTER, N.Y. (WIVB) — IRS officials say they will allow 2018 property taxes to be deducted on federal returns, as long as they are paid in 2017, and the property is assessed before 2018. In Erie County, elected representatives are now allowing you to pay those taxes early, following an executive order from Governor Cuomo allowing them to do so. Town clerks are scrambling to keep up.

It’s all related to the new federal tax bill, which caps the amount of state, local, and property taxes you can deduct from your federal return at $10,000.

As a result, at midnight on New Year’s Eve, Lancaster Town Clerk Diane Terranova will be at town hall. She’ll be marking each 2018 tax payment that came in early. This is a busy week for her staff, as homeowners are trying to take advantage of a tax deduction that will go away when the ball drops Sunday night.

“Around 10, 10:30, it was wall-to-wall people,” Terranova said.

Her staff started collecting property taxes Wednesday morning, four days before the start of a new year.

“It is extra work at a time when we normally are trying to get things together,” Terranova said. “I have people out in both offices on vacation. So we’re scrambling. But we’re doing the best we can.”

Homeowners are hoping to circumvent the SALT and property deduction cap by paying their 2018 property taxes in 2017.

“This is literally unprecedented within county government,” said Erie County Comptroller Stefan Mychajliw.

But, the exact amount due isn’t available for most people.

“I think everybody is doing it a little bit differently,” said Terranova. “We are printing out the 2017 tax, showing to people, and asking, ‘What do you want to pay? This is what you paid last year. You can pay any amount.’”

Homeowners would then get another bill or a refund making up the difference in a few months.

There was question over whether or not it would even work.

“If you look at the rules, it seems like if you pay the tax in that calendar year, it’s eligible for deductibility,” Erie County Executive Mark Poloncarz explained Wednesday morning. “The IRS is going to have to make the call on that.”

Wednesday evening, IRS officials confirmed that the taxes would be eligible to be deducted, as long as the property is assessed and payment is made before 2018.

Poloncarz did offer some advice for people thinking about paying early. He’s telling homeowners not to pay their tax at county offices, unless they live in the City of Buffalo. He also says if you haven’t itemized your returns in the past, you probably don’t need to prepay. As for escrow accounts, Poloncarz says mortgage lenders probably won’t prepay.

Experts are advising you to speak whoever handles your taxes before deciding whether to prepay your property tax. provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Commenters who violate these terms, including use of vulgar language or racial slurs, will be banned. Please be respectful of the opinions of others. If you see an inappropriate comment, please flag it for our moderators to review. Note: Comments containing links are not allowed.

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