Weekly Feature

2018-01-10 / Front Page

Residents flock to prepay 2018 taxes despite confusion


Before the champagne flowed for New Year’s celebrations, many Western New Yorkers were scrambling to prepay their 2018 property taxes, hoping they would thus qualify for certain deductions to be lost with the passage of last month’s federal Tax Cuts and Jobs Act.

In Clarence, residents packed Town Hall for three days as the town collected 903 prepayments for roughly $3.2 million.

“We had a line down the hall,” said Town Clerk Nancy Metzger, noting that as soon as employees would serve those already in line, more would come. “It was a hectic three days.”

Metzger worked with two other staffers to process the 728 walk-ins through the three-day period.

One of the provisions in the Trump administration’s Tax Cuts and Jobs Act trims the state and local tax deduction, a benefit that allows people to deduct property taxes from their federal bill. The initial proposal called for the elimination of the SALT deduction entirely, but the final language of the law caps the deduction at $10,000.

As a result, residents who foresaw their household exceeding that cap in 2018 rushed to pay their property taxes before the start of the new year, hoping to take advantage of the same deductions they’ve become accustomed to for decades.

An executive order signed by Gov. Andrew Cuomo made it easier for municipalities within the state to accept prepayment of taxes, though residents were forced to wait to pay school taxes, as school district taxes are handled separately, at a different time of the year.

Clarence Town Supervisor Patrick Casilio lauded the efforts of Metzger and Town Hall, stating that the small staff went above and beyond to ensure that the hundreds of taxpayers were processed as efficiently as possible.

“We [the county] could have had more foresight, but who knew if this was going to pass? The president hadn’t been successful with legislation, but obviously this one passed. The county mobilized quickly and got the paperwork to us,” Casilio said. “The very next day, our clerk’s office was receiving money.”

A confounding component to the prepayment process was that Erie County has not yet printed and issued bills to municipalities, leaving both taxpayers and their respective town clerks to guess as to how much residents would owe in 2018. The confusion resulted in some residents drastically overpaying, says Metzger, noting that so far she has marked 102 refunds — from 65 cents to $900 — that need to be issued.

“We were only able to accept the town and county prepayment of taxes, so what people were doing was paying what they paid last time and just estimating what they would be paying this year,” she said. “We didn’t have any bills or amounts to go off of.”

While proponents of the new tax bill point toward its doubling of the standard deduction, critics say any reductions in SALT will hinder the ability of taxpayers — particularly in high-tax states such as New York — to afford home ownership and could reduce educational opportunities.

Speaking to The Clarence Bee in November, both Casilio and Geoffrey Hicks, superintendent of the Clarence Central School District, were skeptical of the cap on the SALT deduction and its potential effects in Clarence.

Casilio noted that it is crucial for homeowners in the region to receive a write-off for property taxes as they refinance homes, take on mortgages and pay for home construction, while Hicks said he believes the cap could have a negative impact on the district’s ability to generate revenue in the future.

And for all of the headaches and hand-wringing associated with the prepayments, there could prove to be more on the way, with the IRS announcing that in order to have those prepayments qualify for deductions in 2018, the property taxes must have also been assessed in 2017. In other words, most homeowners who tried to pay based on estimates of what they normally pay may have gone through the process for nothing.

“There’s a good chance that some people will not be able to write off the 2018 taxes they paid, but we’ll see what the federal government says,” Casilio said.

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