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March 29, 2018
The
more than 20,000 Lake County taxpayers who prepaid their property taxes last December are allowed to deduct their prepaid property taxes on their 2017
federal tax return, according to a statement from the U.S. Treasury Department.
“The
Lake County Treasurer’s Office is very pleased to be able to provide clarity on
this question for local taxpayers,” Lake County Treasurer David Stolman said.
“I would like to thank Congressman Peter Roskam (6th District) for
his assistance in seeking confirmation that taxpayers in Illinois are not bound
by previous IRS guidance regarding the prepayment of property taxes.”
The U.S. Department of the Treasury agreed that an
advisory issued by the IRS does not address Illinois and, therefore,
taxpayers in Illinois are not bound by the IRS guidance and are able to deduct
their prepaid property taxes.
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Background:
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On December 27, 2017, the IRS
issued an
advisory regarding pre-payments of 2018 state and local real property
taxes in 2017.
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The advisory provides information and examples relating
to whether a taxpayer who makes a pre-payment in 2017 of real property
taxes for 2018 or later would be eligible to deduct the payment on his or
her 2017 federal tax return.
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Illinois is unique in that
property tax payments made each year are actually paying for the previous
year.
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As a result, prepaid property
taxes made at the end of 2017 were actually prepaying 2017 property taxes,
not 2018.
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The United States Treasury
agreed that the advisory does not address Illinois.
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Taxpayers in Illinois are not bound by the IRS guidance
and they are able to deduct their prepaid property taxes.
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