Mere days away from the GOP tax bill taking effect, New York governor Andrew Cuomo took emergency action and singed an executive order on Friday, December 22nd gifting a property tax deduction to New Yorkers. Under current law, taxpayers who itemize their deductions are allowed to deduct state and local income taxes (which include income, property and sales taxes) in full - assuming they are not in AMT. The current bill, however, caps the SALT deduction to $10,000, aggregating property, income and sales taxes to one deduction limit.

With this anticipated change, many tax professionals had begun to suggest that taxpayers prepay their 2018 taxes in the current year before the deduction goes away. The final tax bill, however, states that any taxes paid, for any tax year after 2018, will only be deductible in tax years after 2018. This resulted in a huge hit for residents of high SALT states (NY, NJ, CA, to name a few).

In a bold move, Governor Cuomo's executive order circumvents this provision of the tax bill by authorizing local officials to immediately levy taxes. This, in essence, deems 2018 property taxes due by the end of the current year. The executive order further suspends local laws limiting partial payments of property taxes. It specifically authorizes and directs local tax collectors to accept partial payments of 2018 property taxes. Although this is a wonderful holiday gift for many, action needs to be taken IMMEDIATELY! Payments need to be postmarked by December 31, 2017 or paid online by 11:59 PM on December 31st in order to be deducted on 2017 tax returns.

Want to know how the new tax bill will affect you? Give us a call at (718) 998-3087 and schedule your appointment today!