On December 22, 2017, President Trump signed into law a tax bill with sweeping legislative tax reform, with one such change limiting the deduction for property and all other state and local taxes to a maximum of $10,000.
In an effort to circumvent the President's tax bill, Gov. Cuomo issued an emergency order on the same day, allowing New York property owners to immediately prepay their 2018 school and property taxes so that the levies can be deducted from their 2017 federal income tax returns. The governor has indicated that this was the first in a series of changes he is planning to make to the New York state tax code to offset the hits New Yorkers will feel from President Trump's tax bill.
While the IRS doesn’t allow deductions for the pre-payment of income taxes, there is no regulation prohibiting the pre-payment of property taxes; hence, any New York taxpayers who are able to make their 2018 property tax payments by Dec. 31, 2017 will get to take the extra payment as a deduction on their 2017 federal tax return.
If you have any questions in regard to the Governor's executive order or the President's recently enacted tax bill, please contact Josh Beisker.