Prepaying Your 2018 Property Taxes
UPDATE: December 27, 2017 at 5:30pm
This afternoon, the IRS issued an advisory indicating that prepayments made in 2017 for 2018 state and local real property taxes in 2017 may be tax deductible, but only under limited circumstances.
The advisory states: “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.”
So, this advisory suggests that the IRS will not allow deductions for prepayments of estimated 2018 state and local property taxes, but will only allow taxpayers to deduct prepayments of any 2018 state and local property taxes that have already been assessed.
We will continue to update this and other articles as news is received.

The Tax Act’s limitation on the deduction for state and local taxes includes property taxes as well as income taxes.  Interestingly, there is no bar to paying 2018 property taxes in advance (as is the case for income taxes).  Therefore, if permitted in your jurisdiction, and if you are not an AMT payer in 2017, you should consider prepaying your 2018 property taxes before December 31.

Property taxes are administered on a local level, so to pay early, you’ll have to check with your county for information on how to do so and, indeed, whether prepayments are accepted.

Also keep in mind that if your mortgage lender pays your property taxes from an escrow account, you will need to co-ordinate with them to ensure that payments are not duplicated.

District of Columbia

The DC Office of Tax and Revenue has issued an official statement on the prepayment of real property taxes, which reads as follows:

The new Federal tax law limits the amount of state and local income and real property taxes that individuals may deduct from their Federal income tax, beginning in calendar year 2018.

Under the new law, the amount that may be deducted is limited to $10,000 of the combined local income and real property taxes. This applies ONLY to taxpayers who itemize their income tax filings.

District property owners may pay their 2018 real property taxes in 2017 to get the full benefit of that deduction in 2017.  These payments MUST be received and recorded in calendar year 2017.  The payments made will be credited to the calendar year 2018 real property tax obligation.

About 40 percent of District taxpayers itemize their income tax filings.  Taxpayers who do not itemize will not receive a tax benefit by paying early.

The Property Tax payment can be made two ways:

The District of Columbia Office of Tax and Revenue’s (OTR) website www.taxpayerservicecenter.com provides the opportunity to pay by electronic check (e-check). Click on Prepay your 2018 Real Property Tax Here to get to the correct form.  The payment MUST be made before midnight December 31, 2017.

The information required to make the payment is

  • the property address (or lot and square numbers),
  • your bank routing number and bank account number.

Wells Fargo will accept payment by check or credit card at any DISTRICT branch office.  Payment MUST be received by close of business on Saturday, December 30.  You MUST bring a 2017 real property tax bill to the bank so that they can process the payment. Some Wells Fargo branches are not open on Saturdays.

Do not mail payments as they may not be recorded in 2017.

Maryland

In Maryland, state law allows counties to enact prepayment legislation, but not all counties have done so. Some do not accept prepayments at all, while others accept “overpayments” and credit the overages to an appropriate account but may not necessarily call such overages a “prepayment.”

Montgomery County

UPDATE Tuesday December 26:

In a special legislative session, Montgomery County Council today voted to allow prepayment of property taxes.  Montgomery County Real Property Tax Account Information and Bill Payment System webpage.

The Council strongly encourages residents to mail in their prepayment, but payments may also be made in person at the Dept. of Finance, Division of Treasury, located at 255 Rockville Pike, Suite L-15, Rockville, MD 20850. This office is on the Monroe Street side of the building.  Prepayments will be accepted only during normal business hours, Tuesday December 26 through Friday December 29 from 8 a.m. to 4:30 p.m.

Note the following:

  • The only amount that you can prepay for 2018 is the amount of County Tax on your 2017 tax bill.  You can obtain a copy of your 2017 bill from the Montgomery County website.
  • Checks and cash are the only acceptable methods of payment.  Make checks payable to “Montgomery County, Maryland.”
  • Your prepayment must be postmarked by midnight December 31st, 2017 and accompanied by the signed Notice of Intent.
  • There will be no online viewable record of your prepayment of 2018 tax until there is a 2018 bill posted and available in the tax system. 2018 bills are likely to be available in July 2018.

Detailed instructions on how to prepay your 2018 Montgomery County property tax are found here.

The prepayment must be accompanied by a signed copy of the Notice of Intent available at this link.

A submission checklist for prepaying your 2018 Montgomery County property tax may be downloaded here.

Prince George’s County

Prince George’s County Council has concluded that it would not be possible to create a system for handling payments, alerting residents to the option and providing prepayment instructions before the end of the year. Property taxes cannot, therefore, be prepaid in Prince George’s County.

Howard County

Howard County will accept prepayments, but the resident must state that the payment is for future financial obligations.

More information coming shortly.

Anne Arundel County

Anne Arundel County will accept prepayments.

More information coming shortly.

Baltimore City

Baltimore City will accept prepayments.

Payments may be made online, by phone or in person at the municipal building. Detailed information for each option is below:

Online Payments and Account Lookup
Baltimore City now offers customers the ability to pay online via credit card or a personal/business checking account.  Online payments are available 24 hours a day, 7 days a week.  Checking account payments are free.  Please have your checking account number and routing number ready. Credit card payments require a Convenience Fee.  Please have your credit card number available.
To begin, look up your account information by clicking one of the links below. Once you look up your account information, you will be re-directed to a secure payment site.
Telephone Payments
Credit card payments can be made over the phone. Please call the City’s payment processing service, ACI Worldwide at 1-877-729-6269. Please note that a convenience fee will be charged for each payment. You will need the following information to use the automated phone service:
  • Account Number Information
  • Credit Card Information
  • Amount of Payment
Online check payments can be made over the phone. Please call the City’s payment processing service, ACI Worldwide at 1-866-397-4609. Please note that there is no convenience fee for this service. You will need the following information to use the automated phone service:
  • City Billing Account Number
  • Bank Transit Routing number (bottom left-hand corner of your check)
  • Bank Account number (bottom of your check to the right of the routing number)
  • Amount of Payment
Walk-In Payments
Payments can be made in person at the Abel Wolman Municipal Building, located at 200 Holliday Street, Baltimore, MD 21202.  Office hours are from 8:30am – 4:30pm, Monday through Friday.
Account information is available through the automated telephone system 24 hours a day, 7 days a week, except during maintenance. Customer service representatives are available between 8:30am and 4:30pm Monday thru Friday.
Please have your account number or bill number ready when calling the numbers below:
Real Property (Real Estate) Tax (410) 396-3987
Personal Property Tax (410) 396-3979
You may also email the Bureau of Revenue Collections at BaltimoreCityCollections@baltimorecity.gov with any billing or payment questions. Please make sure to include as much information related to your inquiry as possible (e.g. property address, account number, citation number, license plate number, etc.).

Baltimore County

Information coming shortly.

Carroll County

Carroll County will accept prepayments.

More information coming shortly.

Harford County

Harford County will accept prepayments.

More information coming shortly.

Information on other Maryland jurisdictions coming shortly.

Virginia

Property taxes are collected by the separate Counties or certain cities; typically through a Commissioner of the Revenue.  Prepayments are allowed: in effect, you can prepay any amount you choose, and if you overpay the treasurer’s office should roll it over to the next year.

Personal property tax on vehicles can also be prepaid.

City of Alexandria

The City of Alexandria accepts prepayments and has issued the following statement:

City of Alexandria Will Accept Prepayment of 2018 Real Estate Taxes, Encourages Taxpayers to Seek Advice from Qualified Tax Professionals
For Immediate Release: December 21, 2017
Federal tax law changes expected to take effect for the 2018 tax year have prompted questions about the potential benefits of prepaying state and local taxes.  Under current law, payments of state and local taxes may be fully exempt from federal and state income tax.  Under the new legislation, which has passed Congress and awaits approval by the President, the exemption would only apply to the first $10,000 of payments each year. The new law does not change tax policies related to returns for the 2017 tax year.
The City of Alexandria accepts prepayment of real estate taxes.  A payment made through December 31, 2017, will be applied to the 2018 real estate tax balance if the taxpayer has no other outstanding balances with the City. However, the City is not providing individual advice about the federal tax impact of prepaying local taxes. There may be no benefit of prepayment depending on final interpretation of the new law; how much the taxpayer is likely to owe in 2018; whether the taxpayer takes the new, higher standard federal income tax deduction in 2018; and other factors. The City encourages taxpayers who are considering prepayment to consult qualified tax professionals before deciding whether to prepay and determining the date by which payment must be sent or received.
Taxpayers who wish to prepay City real estate taxes may estimate their payments based on 2017 tax amounts, but will still be responsible for ensuring payment of actual balances due once bills are prepared in May based on 2018 real estate assessments and the annual tax rate adopted by City Council. Payment in full for the first half of 2018 real estate taxes will be due on or before June 15, 2018.  Taxpayers who prepay in 2017 and whose regular real estate tax payments are made by third parties, such as mortgage escrow services, should notify their normal payment providers to avoid duplicate payments in 2018.
The preferred method of prepayment is by check, with “Prepayment” noted in the memo field.  For the mailing address, and other ways to pay in person or online, see www.alexandriava.gov/Payments.  Note that all payments will be deposited upon receipt even if applied to future balances; the City does not accept payments with future deposit instructions.
For additional information about the real estate tax and prepayment, please visit www.alexandriava.gov/RealEstateTax or contact the City’s Treasury Division at payments@alexandriava.gov or 703.746.3902, Option 8.  

Arlington County

Arlington County will accept prepayment of 2018 property taxes.  Arlington’s chief deputy treasurer, Kim Rucker, notes that people wishing to prepay their property taxes need to contact their mortgage company and their local treasurer and explains “We do need to set their account up so that we can accept a 2018 payment so that its handled properly. It’s not normal. We want to make sure it doesn’t just get refunded,”.

More information coming shortly.

Fairfax County

Fairfax County has allowed residents to prepay their property taxes for at least 10 years but has reportedly seen a sharp spike in interest over the past few weeks.

The official notice can be found on the Fairfax County website and reads as follows:

Prepay 2018 Real Estate and Vehicle Taxes
The Fairfax County Department of Tax Administration (DTA) will accept 2018 real estate and vehicle tax prepayments from Fairfax County taxpayers. Tax rates for 2018 have not been finalized. Taxpayers seeking to prepay 2018 taxes may estimate their tax bill based upon their 2017 taxes, and any difference can be billed or refunded once the tax rate is adopted by the Board of Supervisors in April, 2018. If you are currently getting your taxes escrowed, you will be responsible for working with your mortgage company on any future adjustments to your escrow account.
Please note: Fairfax County makes no representations about the deductibility of the advance tax payments for federal or state taxes.
DTA CANNOT GUARANTEE THAT PAYMENTS RECEIVED AFTER DECEMBER 26, 2017 WILL BE PROCESSED BY THE END OF THE CALENDAR YEAR.
PAYMENT OPTIONS:
ACH or Wire Transfer (instructions)
Payment in person:
12000 Government Center Parkway, Suite 223
Fairfax, VA 22035
This week only our office hours are extended as follows:

  • Tuesday, December 26, 2017 – 8:00 a.m. to 6:00 p.m.
  • Wednesday, Thursday and Friday – December 27 – 29, 2017 – 8:00 a.m. to 6:30 p.m.
By Mail: 
Mail check and send to the address and individual below. Please note on the check the payment is for “prepayment 2018.”
Department of Tax Administration
12000 Government Center Pkwy., Suite 223
Fairfax, VA 22035
(ATTN: Cheniqua Ford)

(Note that DTA cannot guarantee that payments sent by mail will be received and processed by December 31, so this method is not recommended.)

City of Fairfax

The City of Fairfax accepts prepayment of property taxes.  Payment may be made online and the following options are available:

Payment Options available
eCheck provides quick and easy electronic transfer of funds from your existing bank account for payment.  You tell us your bank account number, bank routing number and amount and we handle the transfer electronically.  There is a $1.50 fee involved in this method.  You are given a confirmation of your payment and all information is electronically secured.
Credit Cards are another payment option we offer.  We can accept American Express, Visa, Master Card and Discover cards for all personal property, MVLT and real property tax payments.  A convenience fee is chargedfor the use of credit cards.  (The convenience fee is not charged by or paid to the City of Fairfax.)
PayPal is a payment option being offered if you have an existing PayPal account.  A convenience fee is charged for the use of PayPal.  (The convenience fee is not charged by or paid to the City of Fairfax.)
Debit and Forget it is a Real Estate only pre-payment ACH (Debit) option being offered.  You can set the payments up on based on your schedule (weekly, monthly, quarterly, semi-annually, annually).  A fee of $1.50 will be charged per ACH.  See the Debit and Forget page for more details.   

 

Note that an original signature is required in order to begin the Debit and Forget It process, and electronic signatures cannot be accepted.  This option therefore requires an in-person visit to the Treasurer’s Office at 10455 Armstrong Street.

Other Virginia jurisdictions coming shortly.

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