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Harrisburg says residents can prepay 2018 property taxes ahead of new GOP tax code

Written by Brett Sholtis/WITF | Dec 28, 2017 10:03 AM
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Gail Trachtenberg and Lewis Eron prepay part of their 2018 property tax bill at the township building in Cherry Hill, New Jersey, on Thursday, Dec. 22, 2017. People across the country have been trying to prepay property taxes before a federal tax overhaul kicks in and caps deductions for state and local taxes. (AP Photo/Geoff Mulvihill)

The city of Harrisburg is allowing residents to prepay their 2018 real estate taxes.

Harrisburg treasurer Dan MIller says, he wants residents to have a chance to get ahead of the new rules passed with the GOP's tax overhaul.

Under the new tax law, the standard deduction will double. Miller says, that could cost homeowners money. Those who itemize deductions save about $250 for every $1,000 they pay.

By allowing residents to prepay for 2018, they can still itemize deductions under the current law.

Miller says he wants to give people a chance to save money. "A lot of times people see the city as inflexible and difficult to work with. I want to show people that we are trying to be efficient and ... smart about the things we do."

Still, he knows many of the city's roughly 17,000 homeowners won't be able to take advantage of the chance. Residents only have until the end of the year to file.

Harrisburg is not alone in the last-minute push to pay property taxes before the new tax code takes affect. Across the country, many towns have put out similar exceptions. 

Other midstate counties have not joined that wave, however. Longtime Cumberland County treasurer John Gross says, prepaying property taxes is against state law. 

"Not anywhere in Pennsylvania can you do this," he said. 

York County deputy treasurer Meredith Schreffler says York County also won't accept 2018 property taxes. 

The Pennsylvania Department of Revenue issued a statement Thursday. It says, federal law "does not appear to prohibit a deduction for prepaid 2018 real estate taxes." 

"Pennsylvania law does not specifically address the situation that many in the commonwealth are now facing due to federal tax changes that now limit deductions beginning in 2018. While the commonwealth cannot compel county and local governments to accept prepayments of 2018 real estate taxes, local taxing authorities should take all appropriate action to assist taxpayers adversely impacted by the changes in federal tax law."

The Department of Revenue also pointed to a December 27 Internal Revenue Service (IRS) advisory on the pre-payment of property taxes, which said, "In general, 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."

Miller says Harrisburg has never allowed a prepay before, and probably won't have reason to do it again anytime soon. He says, if it helps some city residents, then it was worth making the exception. "We're not trying to cause problems. We're just trying to be accommodating." 

Note: This story has been updated to include new information provided by the Pennsylvania Department of Revenue. A previous version of this story included a reference to this Reading Eagle report

Published in Harrisburg, News

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