Illinois Homeowners Rush To Pay Taxes Before GOP Plan Kicks In

Illinois residents are among those rushing out in droves to pre-pay their property tax bills before the new GOP tax plan — recently signed into law by President Donald Trump — takes effect in 2018. The new plan caps state and local tax deductions at $10,000, and many are hurrying to pay the first installment of their upcoming property taxes before the end of the year.

In Illinois, homeowners can prepay their property taxes, but if you want to take advantage of the uncapped deductions one last time, you'd better hurry: The deadline is Friday, Dec. 29.

The IRS Wednesday issued some guidance about pre-paying and deductions:

The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances.

The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.

Last week, Will County treasurer Steve Weber's office sent a series of tweets letting residents know that pre-payments must be in the county treasurer's office by 4:30 p.m. Friday. Anything that comes in after that will be marked for the 2018 calendar year.

In Cook County, nearly 50,000 taxpayers have made a total of $312 million in early payments, the Chicago Tribune reported. A year ago, just 1,700 people pre-paid $13 million.

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The method and form of payment may vary by county. For example, Cook County allows taxpayers to download their bill and pay online using a bank account or credit card, while Will County does not accept online payments or take credit cards. Homeowners who want to pay early should check with their county treasurer to find out how they're able to pay and when payments must be received.

Kane County Treasurer Dave Rickert said Tuesday that more than 1,000 people had already pre-paid property taxes and he expects the number to more than double by the end of the week, according to Kane County Connects. The deadline in Kane County is 4 p.m. Friday.

Rickert told the Chicago Tribune that seasonal help as well as staff from the county clerk's office have been brought in to help with the influx of prepayments, adding he anticipates receiving about $40 million in early payments before it's all said and done.

“There’s a lot of interest this year because of the tax-reform initiative,” Rickert said. “The way I understand it, the standard exemption goes up to $24,000 per family," he said. The standard exemption for single filers is $12,000 under the new plan. "Since you’re limited to a $10,000 deduction for property taxes, that means you’d have to find another $14,000 (in deductions) before you have any benefit for itemizing. For most people, that essentially means the property-tax benefit (of itemizing) is going to go away," Rickert said.

Residents of Illinois aren't the only ones clamoring to prepay property taxes. In New Jersey, Gov. Chris Christie issued an executive order allowing residents to prepay 2018 property taxes to alleviate the impact of the new tax plan on homeowners. The order requires municipalities to credit payments received or postmarked on or before Dec. 31 to the 2017 calendar year.

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