Legislation Allows Homeowners to Prepay Property Taxes

The Montgomery County Council held a special legislative session Tuesday to enable residents to prepay their 2018 county property tax in 2017, which would increase a deduction on their 2017 federal tax return.

The measure passed by a 7-1 vote.

The bill requires the county to refund any amount paid that is greater than the property tax owed and would permit the county to bill the property owner for any amount of the prepayment that is less than the 2018 property tax once it is finally determined.

“Initial speculation was that only the most affluent residents could take advantage of this option,” Council President Hans Riemer said. “But with the benefit of public input, we now know that the prepayment option will be a potential benefit to thousands of county residents of more average means.”

Maryland tax law authorizes the governing body of a county to enact a law permitting taxpayers to make an advance payment of county property tax. State law requires that the advance payment must be the full amount of county property tax owed for the prior year.

On Dec. 22, President Donald Trump signed the federal Tax Reform Act into law. The act will limit the deduction for state and local income, sales, and property tax to $10,000 beginning in 2018. The advance payment of 2018 property tax before the end of 2017 may be deductible for some taxpayers on their 2017 federal income tax return.

Robin Ficker, the only Republican seeking the county executives seat in 2018, says he was not allowed to testify at the hearing, but that he would have supported the measure as a means to provide some relief to last year’s property tax increase.

Montgomery County’s Finance Department encourages county taxpayers who intend to prepay their 2018 property tax this year to mail their payment. The county is providing information on the websites of the county, the Finance Department, and the Council, and also via the Paperless Airplane and Regional Services Center newsletters and on social media.

Before mailing a payment, residents must print a Notice of Intent form located on the websites, fill it out, sign it, and mail it with their payment to the Treasury Office: ‪255 Rockville Pike, Suite L-15, Rockville, MD 20850‬.

State law requires that residents who intend to prepay their property tax must pay the full amount of their 2017 county property tax. If residents owe property tax for the current or prior years, the payment will be applied to any past due amount before it is applied to any advance payment.

Residents are encouraged to consult with their tax advisor to understand whether prepaying their 2018 property tax this year will benefit their tax situation. Montgomery County makes no representation as to whether the prepayment may be deducted for federal income tax purposes.

Councilmember Craig Rice was the only member of the council to oppose the legislation. Councilmember Tom Hucker was absent.

Instructions and more information on property tax prepayment for 2018 can be viewed here.

Submissions must include a signed Notice of Intent form, which can be found here.

A checklist for prepaying 2018 property taxes can viewed here.

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2 Responses to “Legislation Allows Homeowners to Prepay Property Taxes”

  1. Avatar
    On December 27, 2017 at 8:46 am responded with... #

    Better check with your CPA, and fast. It is likely illegal to deduct a prepayment of a 2018 tax liability on your 2017 return.

    So enjoy the IRS coming back for more money later in 2018 because you took illegal deductions.

  2. Avatar
    On December 27, 2017 at 8:59 am responded with... #

    I thought the goal has ALWAYS been to get the “wealthy” to pay more of their “fair share”….sounds like someone is realizing that if folks can keep MORE of their own money it is good. #winning

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